By Angela Moon
NEW YORK, Jan 13 (Reuters) - A measure of world stock markets rose to near a six-year high on Monday while the dollar and bond yields slipped as last week's surprisingly weak U.S. jobs data strengthened the case for the Federal Reserve to keep interest rates low for longer.
Wall Street kicked off a week full of corporate earnings on a cautious note on growing concerns that stocks may have become expensive with the benchmark S&P 500 at its highest level in nearly seven years. The index surged almost 30 percent in 2013.
"It may be that people are speculating that it is not going to be a very good season at this point," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"The last three earnings seasons, people have been questioning how much more earnings improvement can we get without revenue improvement, and it may be that is finally catching up with companies."
Investors will keep an eye on the fourth-quarter earnings, with major U.S. banks including JPMorgan, Citigroup and Goldman Sachs announcing results this week. European earnings will gather pace in the last week of the month.
According to Thomson Reuters data, fourth-quarter profits are expected to grow 7.3 percent over the year-ago period. However, the 9.8 ratio of negative guidance to positive outlooks is currently the largest on record.
U.S. stocks traded mixed on Monday. The Dow Jones industrial average was down 5.46 points, or 0.03 percent, at 16,431.59. The Standard & Poor's 500 Index was up 0.04 point, or 0.00 percent, at 1,842.41. The Nasdaq Composite Index was up 3.66 points, or 0.09 percent, at 4,178.32.
Equities in emerging markets rallied as investment funds moved back to riskier assets. Banking stocks rallied in Europe after regulators agreed to ease a new rule on how banks' leverage ratios are calculated.
Friday's data showed the U.S. economy posted the weakest monthly job growth in three years in December. This triggered a slide in U.S. Treasury yields, with the benchmark rate posting its biggest one-day drop since October.
The report did not change expectations that the Fed would wind down its bond-buying program by the end of the year, but interest rate futures markets pushed back the timing of the first rate hike toward late 2015 from mid-2015 .
"The market is taking its leads from U.S. Treasury markets, which are generally weighing on the dollar across the board," said Adam Cole, global head of FX strategy at RBC Capital Markets.
MSCI's world equity index gained 0.2 percent, approaching a six-year high set last month, buoyed by a 0.9 percent rise in emerging stocks.
European stocks rose 0.3 percent, staying hear a 5-1/2 year peak. Japan was closed for a public holiday.
European banking stocks rose 1.6 percent after global banking regulators agreed on Sunday to ease a rule on how banks' leverage ratios are calculated to try to avoid crimping financing for the world economy.
Benchmark 10-year euro zone bond yields were slightly lower on the day while Bund futures prices rose 19 ticks. Italian bond yields fell to 3.9 percent, near an eight-month low hit last week.
The benchmark 10-year U.S. Treasury note was up 4/32, its yield at 2.845 percent, slightly above Friday's lows.
The dollar dropped to its lowest in four weeks against the yen. In early New York trading, the dollar slid nearly 1.0 percent against the yen to 103.13 yen, after earlier falling to 102.97, its lowest level since Dec. 18.
The greenback was flat against a basket of six major currencies.
In commodity markets, gold extended its rally to a one-month peak at $1,254.05 an ounce having climbed 1.5 percent on Friday. Gold is the top-performing asset so far this year ().
Oil prices retreated after news of a six-month deal with Iran to curb its nuclear program and U.S. President Barack Obama urged Congress not to impose additional sanctions on the country. NYMEX oil futures lost 0.8 percent, while Brent crude fell was trading steady around $107 a barrel.