* Dow hits record high, S&P nears new record
* Crude oil up on rising Ukraine tensions
* Euro comes under pressure after ECB comments
* U.S. debt prices fall before heavy week of data
(Adds opening of U.S. markets; changes dateline; previous
By Herbert Lash
NEW YORK, May 12 Global equity markets surged on
Monday, with the Dow industrials setting a record high as stocks
advanced in a broad rally spurred by strong corporate results
and an improving economic outlook.
Prices of U.S. Treasury debt fell, while European shares
scaled six-year highs, underpinned by fresh takeover activity
and renewed speculation about monetary stimulus from the
European Central Bank.
On Wall Street, nine of the 10 primary S&P 500 sectors were
in positive territory, with gaining stocks topping declining
shares by 4 to 1 on the New York Stock Exchange and by almost 5
to 1 on the Nasdaq stock market.
MSCI's all-country world index rose 0.6
percent and the pan-European FTSEurofirst 300's index
of leading shares climbed by a similar margin.
The Dow set an intra-day high and the S&P 500 was less than
four-tenths of 1 percent away from a new record high.
The Dow Jones industrial average rose 97.68 points,
or 0.59 percent, to 16,681.02. The S&P 500 gained 14.46
points, or 0.77 percent, to 1,892.94 and the Nasdaq Composite
added 58.674 points, or 1.44 percent, to 4,130.543.
Weak economic numbers during the harsh winter and surprising
strength in the bond market had kept money in fixed income, said
David Kelly, chief global strategist for JPMorgan Funds in New
York. An improving economic outlook has drawn investors back
into stocks, he said.
"I hate to make day-to-day rationalizations of the behavior
of the market, but the key point is, falling unemployment and
rising economic growth ultimately mean that both interest rates
and stocks prices are likely to move higher," Kelly said.
Equity markets shrugged off rising tensions over Ukraine.
Pro-Moscow rebel organizers of a weekend referendum in Ukraine
said nearly 90 percent had voted in favor of self-rule, possibly
opening the way for the region to break away from Kiev in a
conflict spinning increasingly out of control.
U.S. Treasuries yields rose before a heavy week of data that
includes retail sales and consumer price reports that will be
watched for signs of economic strength and whether inflation is
rising from levels below the Federal Reserve's targets.
Benchmark 10-year notes were last down 6/32 in
price to push their yield up to 2.6467 percent.
The euro traded near break-even against the dollar and yen,
unperturbed by the weekend referendum in Ukraine.
Against sterling, however, the euro fell to a 16-month low
on growing bets the European Central Bank will ease monetary
policy just as the Bank of England prepares to raise rates.
The euro's gains were trimmed after dovish comments from
Austria's central banker, Ewald Nowotny. He told reporters it
would take more than a cut in interest rates to combat low
inflation in the euro zone.
The euro was down 0.02 percent against the greenback at
$1.3754. The dollar rose 0.27 percent against the yen
Global oil prices rose on as investors braced for a possible
escalation in Ukraine's civil conflict and the European Union
expanded sanctions to Russian individuals and Crimean companies.
Though it is unlikely the turmoil would lead to a disruption
in energy supplies from Russia, top global oil exporter Saudi
Arabia volunteered to supply more crude in the event of a
Brent crude was up 42 cents at $108.31 a barrel.
U.S. crude gained 72 cents to $100.71 a barrel.
(Reporting by Herbert Lash; Additional reporting by Marc Jones
in London; Editing by Dan Grebler)