* Investors bet on euro zone stimulus after Draghi's
* Benchmark S&P surges past 2,000 mark for first time
* Yields on most euro zone govt bonds hit record lows
* Euro at 11-month low against the dollar
(Adds close of European bond, stock markets)
By Herbert Lash
NEW YORK, Aug 25 Global equity markets rallied
on Monday, with the U.S. benchmark S&P topping the 2,000 mark
for the first time, as expectations grew that the European
Central Bank would move to boost economic growth if inflation
The euro fell to near a one-year low against the dollar and
yields on euro zone government debt fell to historic lows as
investors took the view that ECB President Mario Draghi would
use all available tools to foster growth.
In a landmark address to central bankers on Friday in
Jackson Hole, Wyoming, Draghi suggested a major shift in ECB
policy away from a focus on austerity toward reviving growth.
Speculation grew that the ECB was preparing a program of
asset purchases to counter wilting inflation when it meets next
week, driving yields on bonds from Germany, France, Italy,
Spain, Portugal, Ireland and elsewhere to all-time lows.
European stocks rallied, with many country and regional
indexes climbing more than 1 percent, and Wall Street followed.
The S&P surged in a broad rally as advancing volume outpaced
declining volume by about 2 to 1.
"European investors came in today with the mindset that
we're going to have a more supportive fiscal and monetary policy
stimulus, and therefore we ought to see better times ahead in
terms of economic growth and corporate earnings," said Phil
Orlando, chief equity market strategist at Federated Investors,
in New York. "Europe is essentially driving the U.S.," he said.
The Dow Jones industrial average was up 77.00 points,
or 0.45 percent, at 17,078.22. The Standard & Poor's 500 Index
was up 8.23 points, or 0.41 percent, at 1,996.63. The
Nasdaq Composite Index was up 13.56 points, or 0.30
percent, at 4,552.11.
In Europe, the FTSEurofirst 300 index of top
regional shares rose 1.13 percent to close at 1,366.61. The
London stock market was closed for a public holiday.
MSCI's all-country world index gained 0.44
The benchmark 10-year U.S. Treasury note rose 2/32
in price to yield 2.3962 percent, while European debt rallied.
The 10-year German bund hit a record low of 0.926
percent, before pulling back to yield 0.941 percent.
The dollar rose as the euro dropped on weak German economic
data and Draghi's comments.
The euro skidded against the dollar to $1.3184 at one
point after news that Germany's Ifo business climate index fell
to 106.3 from 108, its lowest since September 2013. The euro was
last trading at $1.3200, down 0.32 percent on the day.
Brent crude traded just above $102 a barrel, while ample
supply and weak demand dampened prices for U.S. crude.
Brent crude was unchanged at $102.29. U.S. crude
was down 45 cents at $93.20 a barrel.
S&P 500 crosses 2,000 level: link.reuters.com/zec72w
(Reporting by Herbert Lash; Additional reporting by Francesco
Canepa in London; Editing by Dan Grebler)