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GLOBAL MARKETS-Stocks edge up near record; euro off on ECB bets
June 2, 2014 / 8:42 PM / 3 years ago

GLOBAL MARKETS-Stocks edge up near record; euro off on ECB bets

* Expected ECB stimulus later in week pressures euro
    * Dow, S&P 500 post closing highs after ISM manufacturing
data revision
    * Copper jumps after Chinese data, oil off on dollar's
strength

 (Updates to U.S. market close, changes comment)
    By Rodrigo Campos
    NEW YORK, June 2 (Reuters) - A global gauge of equities
edged up to a more than six-year high on Monday after strong
Chinese and U.S. factory data, while soft numbers out of Europe
heightened expectations for action from the European Central
Bank, pressuring the euro.
    After early losses, U.S. stocks finished broadly higher,
with both the S&P 500 and Dow industrials closing at record
highs, after the Institute for Supply Management revised its
manufacturing index for May to show faster acceleration than in
the previous month. ISM had initially reported a slowdown in the
pace of factory growth. 
    "The market has lately been focused more on the weak
economic news and the bond market, but we saw a reversal of that
today with the revised (ISM) numbers. We got a better number and
the bonds are selling off," said Rick Meckler, president of
hedge fund LibertyView Capital Management in Jersey City, New
Jersey.
    "But it's hard to move the (stock) market higher considering
we are fairly fully valued at this point."
    Yields on U.S. Treasuries posted the largest daily advance
in more than six weeks, propelled by the revised ISM data. The
yield on the benchmark 10-year Treasury was recently
at 2.528 percent, still within last week's range.    
    At the closing bell on Wall Street, the Dow Jones industrial
average rose 26.46 points, or 0.16 percent, to 16,743.63;
the S&P 500 gained 1.4 points, or 0.07 percent, to
1,924.97; and the Nasdaq Composite dropped 5.42 points,
or 0.13 percent, to 4,237.20.
    Slight gains in European shares and a 2.1 percent
jump in Tokyo's Nikkei lifted MSCI's world index
 to a 6-1/2-year intraday high that is about 1.5
percent away from the lifetime record set in late 2007.
    Slower-than-expected manufacturing growth in the euro zone
piled pressure on the ECB to act aggressively when it meets on
Thursday, keeping the euro at a near four-month low versus the
U.S. dollar. 
    The euro fell 0.2 percent to hit $1.3597, not far
from a near four-month low of $1.358 touched last Thursday.
    Extra pressure for the ECB to act aggressively came from
German annual inflation data, which slowed to its weakest rate
in nearly four years in May. 
    "The euro has been trading on the softer side in general as
we go into the ECB meeting as there is some level of caution,"
said Alan Ruskin, global head of G10 currency strategy at
Deutsche Bank in New York.
    The greenback was broadly stronger. It rose 0.6 percent to
102.4 yen and a gauge of the dollar against a basket of
major currencies rose 0.3 percent. 
    The relative strength in the dollar weighed on oil prices,
but copper jumped as China's manufacturing activity expanded at
the fastest pace in five months in May, raising expectations of
an increase in demand.  
    Three-month copper on the London Metal Exchange 
climbed 1.3 percent to $6,932.50 a tonne. The metal gained 3.1
percent in May, its first monthly advance since December.
 
    U.S. crude prices fell 0.3 percent to $102.44 a
barrel, and Brent lost 0.6 percent to $108.80.
    With risk appetite strong, safe-haven gold slid for a fifth
straight session. Spot gold was down 0.6 percent at
$1,243 an ounce after earlier hitting a four-month low of
$1,240.69. 

 (Reporting by Rodrigo Campos; Additional reporting by Ryan
Vlastelica and Richard Leong; Editing by Chizu Nomiyama and
Leslie Adler)

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