* China's factories expand at best pace in 7 months
* Wall St opens higher, S&P 500 up after snapping
four-session winning streak
* Expectations of unchanged Fed policy weigh on dollar, lift
By Angela Moon
NEW YORK, Oct 24 Global equity markets edged
higher on Thursday, boosted by signs of growth in China's
manufacturing sector, while rising expectations that the Federal
Reserve will keep its stimulus efforts in place for months kept
U.S. Treasuries yields near three-month lows.
Wall Street opened higher a day after the S&P 500 index
broke a four-session winning streak as investors grappled with a
host of corporate earnings and muddled economic data.
The low Treasuries yields kept the dollar pressured while
helping the euro as the Fed's easy monetary policy outweighed
weaker euro zone data. The euro was up 0.3 percent at
$1.3816, having earlier hit $1.3824, its strongest level since
November 2011, while the dollar fell broadly, hitting a near
nine-month low of 79.081 against a basket of currencies.
Fed policy is seen as very data dependant, though economic
indicators over the coming month are likely to be skewed by the
effects of the government shutdown. That could limit insight on
the actual state of the economy and to what degree the shutdown
and the fight over raising the debt ceiling harmed growth.
"What we've been seeing since the government shutdown and
debt ceiling was resolved is a desire to jump back into
Treasuries," said Jason Rogan, managing director in Treasuries
trading at Guggenheim Partners in New York.
"Most market participants are of the mind that the Fed is on
hold for the foreseeable future."
Treasuries have rallied since data on Tuesday showed
employers added fewer jobs than expected in September, stroking
fears the economy was slowing, even before the government's
However, on Thursday the benchmark 10-year U.S. Treasury
note was down 6/32, its yield at 2.5052 percent.
Data showed activity in China's vast factory sector reached
a seven-month high this month, easing concerns about a slowdown
in Chinese exports, which would point to weakening global
On Wall Street, the Dow Jones industrial average was
up 87.50 points, or 0.57 percent, at 15,500.83. The Standard &
Poor's 500 Index was up 4.83 points, or 0.28 percent, at
1,751.21. The Nasdaq Composite Index was up 20.37
points, or 0.52 percent, at 3,927.44.
European shares recovered their poise, climbing back toward
five-year highs thanks to strong corporate results and the
encouraging manufacturing data from top metals consumer China.
The pan-European FTSEurofirst 300 index was up 0.4
percent at 1,284.89, recovering from the previous session's fall
and climbing back toward Tuesday's five-year highs of 1,291.93.
MSCI's world equity index added 0.2 percent,
slightly retracing losses of 0.6 percent on Wednesday, when
markets were rocked by fears that a spike in Chinese short-term
rates could hurt growth.
The U.S. manufacturing Purchasing Managers Index rose at its
slowest pace in a year this month and factory output contracted
for the first time since late 2009. The survey was conducted
partly during the 16-day U.S. government shutdown, which
economists expect will slow overall U.S. growth slightly in the
last three months of 2013.
Markit's PMI index for the 17-nation euro area showed
business activity eased slightly in October after a pick-up in
September, though it confirmed that the region's economic
recovery was taking root.
U.S. corporate earnings continue to pour in, with 47 S&P 500
components expected to report on Thursday, including
Microsoft Corp and Amazon.com Inc after the
close of trading.
"The earnings picture was not supposed to be that great this
quarter and in fact we are seeing that. The thing that is
disappointing is top-line revenue, and those are not good
signs," said Keith Bliss, senior vice-president at Cuttone & Co
in New York.
"So what is going to drive the market from that point is
going to be Washington policy and Fed policy."
In commodities trading, gold was the biggest mover,
up 0.4 percent to $1,336.50 an ounce, nearing a four-week high
as the outlook for an unchanged Fed policy heightened concerns
about inflation risk.
"Postponement of tapering means higher liquidity in the
market, probably higher inflation risks in the longer term,"
Commerzbank analyst Eugen Weinberg said. "That's likely to lead
to higher interest in gold."
Brent crude futures slipped 0.5 percent to near $107 a
barrel as rising supplies of crude oil in the United States
drove prices toward a two-month low, while U.S. crude fell for a
fourth straight session to its lowest since June. But the
selling was not as heavy as in the previous session.
Brent crude oil was down 49 cents to $107.31 a
barrel while the U.S. crude oil benchmark, also known as
West Texas Intermediate or WTI, shed 47 cents to $96.49 a
Copper edged down to its lowest in more than a week
as concerns about the current tight credit conditions in China
and its impact on demand offset the brighter growth outlook.