* Rising stocks on Wall Street lead European shares to
* Brent crude slips below $115 a barrel, gold prices also
* Euro rebounds as dollar trades near six-weak highs
By Herbert Lash
NEW YORK, Sept 4 Global equity markets rose,
lifted by a surge on Wall Street, and gold prices eased on
Wednesday as investors took in stride a potential limited
American military strike against Syria and data from around the
globe suggested an improving world economy.
The best monthly U.S. auto sales figures in almost six
years, U.S. trade data that suggested a growing economy this
quarter and data from Europe and China fueled the optimism.
The dollar hovered near a six-week peak against a basket of
currencies as encouraging U.S. manufacturing data on Tuesday
reinforced expectations that the Federal Reserve would cut back
its economic stimulus later this month.
Markets showed little reaction to a Fed report that the U.S.
economy expanded at a "modest to moderate" pace in most of the
country between early July and late August. The Beige Book
report was just strong enough to reinforce the prospect of a
pullback in monetary stimulus.
Brent crude drifted lower as it appeared a strike against
Syria would remain limited, quelling fears of supply disruptions
in the Middle East, and gold prices fell below $1,400 an ounce.
A gain of almost 1 percent on Wall Street led share prices
in Europe to rebound. MSCI's measure of global equity markets
rose 0.6 percent and the pan-European Eurofirst
300 index of leading shares closed 0.2 percent higher.
"People hope there will just be a tactical strike and that's
it," said Mark Grant, managing director at Southwest Securities
in Fort Lauderdale, Florida. "But there are worries about
retaliation and a wider conflict isn't priced into the market."
A second day of stock gains retraced most of last week's
Syria-related losses on Wall Street, pushed by auto sales.
The Dow Jones industrial average was up 106.29
points, or 0.72 percent, at 14,940.25. The Standard & Poor's 500
Index was up 14.08 points, or 0.86 percent, at 1,653.85.
The Nasdaq Composite Index was up 37.18 points, or 1.03
percent, at 3,649.79.
Auto sales pointed to the industry's strongest month since
just before the start of the 2007-2009 recession. U.S. auto
sales were on a pace to post a gain as high as 17 percent in
"If these sales numbers are the best in six years, that
points to an improving economy and that's helping the market,"
said Stephen Massocca, managing director at Wedbush Equity
Management LLC in San Francisco.
Stocks also were buoyed by U.S. trade data that suggested
economic growth this quarter. Euro zone businesses had their
best month in more than two years in August as orders increased
for the first time since mid-2011, while growth in China's
services sector hit a five-month high.
The euro pared losses to rise against the dollar, up
0.3 percent at $1.3208, while the dollar index was down
0.24 percent at 82.160.
Oil prices edged lower. While Syria is not a big oil
producer, investors worry a U.S. strike against the country
could spread unrest in the Middle East and disrupt supplies from
the region, which pumps a third of the world's crude.
A potential Syria strike has driven U.S. oil prices to their
highest this year and Brent oil to a six-month peak as traders
have priced in a supply risk factor.
Brent crude fell 77 cents to settle at $114.91 a
barrel. U.S. crude settled $1.31 lower at $107.23 a
"You're mainly seeing a pullback on the perception that we
may not strike Syria and that if we do, Congress will rein in
Obama's plans," said Michael Lynch, an oil analyst and president
of consultancy Strategic Energy & Economic Research Inc. in
"The chance of contagion appears much less reduced compared
to last week," Lynch said.
U.S. government debt prices traded near break-even as
bargain-minded investors emerged to help stabilize a market that
has been on edge over the possibility the Federal Reserve will
reduce its bond-buying program.
The benchmark 10-year U.S. Treasury note was
down 9/32 in price to yield 2.8948 percent.
In Europe, underlying sentiment for top-rated Bunds remained
firm, as concern over Syria outweighed this week's
forecast-beating European and U.S. manufacturing data, which
reinforced bets the Fed would soon pare its bond purchases.
Bund futures closed 12 ticks higher at 139.73, off
a session high of 139.96.