* MSCI world index rises along with U.S. stocks
* U.S., China factory sector data supportive
* Euro zone PMIs show euro zone recovery intact
(Updates with oil price settlements)
By Caroline Valetkevitch
NEW YORK, May 22 World stock indexes climbed on
Thursday as data showed factory activity picked up in both the
United States and China, while U.S. Treasuries prices slipped on
the signs of growth in the world's largest economies.
The dollar rose against major currencies as the higher bond
yields revived appeal for the greenback.
China's factory sector had its best performance in five
months in May, while U.S. factory output growth hit its fastest
pace since February 2011, providing support for stocks.
In Europe, an unexpected pickup in the service industry was
offset by lackluster factory activity, though it was enough to
show the euro zone's fragile recovery has some traction.
"The U.S. manufacturing (sector) is certainly in an
expansion mode, and that's a good indication going forward, that
it will remain on the bullish side of the equation for some
time," said Peter Cardillo, chief market economist at Rockwell
Global Capital in New York. The data was helping to support
stocks, he noted.
The United States endured a sluggish first quarter, which
has given the Federal Reserve some pause, and minutes of its
last policy meeting show it in no rush to raise rates.
MSCI's all-world equity index, which tracks
shares in 45 nations, gained 0.5 percent. On Wall Street, the
Dow Jones industrial average rose 27.8 points or 0.17
percent, to 16,560.86, the S&P 500 gained 7.55 points or
0.4 percent, to 1,895.58 and the Nasdaq Composite added
30.074 points or 0.73 percent, to 4,161.611.
European shares finished up 0.1 percent though off
early highs as worries over the French economy pulled the Paris
The dollar index, reflecting the greenback's value
against the euro, yen and four other currencies, gained 0.2
percent at 80.246, bringing its month-to-date gain to about 1
The euro was last down 0.26 percent, at $1.36, while
the dollar gained 0.3 percent against the yen at 101.63 yen
after hitting a 3-1/2-month low a day earlier.
U.S. 10-year Treasury yields, which have a good correlation
with the dollar/yen pair, edged up to 2.55 percent.
Last week, they hit 2.473 percent, the lowest since October.
Low-rated euro zone bonds stabilized as expectations the
European Central Bank will ease monetary policy overshadowed
concerns about EU elections.
GOLD GAINS, OIL SLIPS
In commodities, gold prices rose after Wednesday's Fed
minutes indicated no intention to raise interest rates soon.
Spot gold was up 0.4 percent to $1,294.34 an ounce.
Brent crude oil dipped 19 cents to settle at $110.36
a barrel, while U.S. crude fell 33 cents to settle at
(Additional reporting by John Geddie in London, Angela Moon,
Chuck Mikolajczak and Richard Leong in New York; Editing by Dan