* MSCI world index rises, U.S. stocks up in early trading
* U.S., China factory sector data supportive
* Euro zone PMIs show euro zone recovery intact
(Updates with U.S. market openings, changes dateline; previous
By Caroline Valetkevitch
NEW YORK, May 22 World stock indexes edged
higher 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 turned in its best performance in
five months in May, while U.S. factory output growth hit its
fastest pace since February 2011, reports showed, providing some
support for stocks globally.
In Europe, an unexpected pickup in the service industry was
offset by lackluster factory activity, but was enough to show
that the euro zone's fragile recovery has some traction.
The United States endured a sluggish first quarter, with
poor weather blamed for underwhelming data. This has given the
Federal Reserve some pause, with minutes of its last policy
meeting showing it was in no rush to raise interest rates.
Other U.S. data on Thursday showed a higher-than-expected
number of Americans filed new claims for unemployment benefits
"We have been in a two-steps forward, one step back
progression on the (U.S.) economy and that can be extended to
the global economy as well," said Jim Russell, senior investment
strategist at U.S. Bank Wealth Management in Cincinnati.
MSCI's all-world equity index, which tracks
shares in 45 nations, gained 0.4 percent. On Wall Street, the
Dow Jones industrial average rose 16.75 points, or 0.10
percent, at 16,549.81. The Standard & Poor's 500 Index
was up 5.78 points, or 0.31 percent, at 1,893.81. The Nasdaq
Composite Index was up 25.21 points, or 0.61 percent, at
European shares were up 0.1 percent after paring
early gains as worries over the French economy pulled the Paris
bourse lower on the day.
In the foreign exchange market, the dollar index
gauging its value against the euro, yen and four other
currencies was up 0.2 percent at 80.223, bringing its
month-to-date gain to about 1 percent.
U.S. 10-year Treasury yields, which have a good correlation
with the dollar/yen pair, edged up to 2.54 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, OIL GAIN
In commodities, gold prices rose after Wednesday's Fed
minutes indicated no intention to raise interest rates soon.
Spot gold rose 0.5 percent to $1,297.60 an ounce.
Brent crude oil inched up on the better-than-expected data
on China's manufacturing industry, which suggested a brighter
outlook for demand in the world's No. 2 oil consumer.
Brent crude was up 14 cents at $110.69 a barrel, while
U.S. crude fell 13 cents to $103.94.
(Additional reporting by John Geddie in London; Chuck
Mikolajczak and Richard Leong in New York; Editing by Dan