| NEW YORK
NEW YORK The blue-chip Dow Jones index extended its record-breaking run on Wednesday and world stock markets edged higher, led by strong gains in Asia, while the euro slid against the U.S. dollar a day before a European Central Bank meeting.
Bets that the ECB at its policy meeting on Thursday could signal future interest-rate cuts pressured the euro. The Bank of Japan will begin a two-day meeting on Thursday, but it is expected to hold its fire this week.
U.S. data showing a steady manufacturing sector and strong gains in private employment supported equity markets. Stocks, despite record highs, are still at attractive valuations, analysts said.
"When you reach a record high it triggers introspection about whether we're over-valued, but I don't expect a pullback because the reasons we've climbed are still in place," said David Joy, chief market strategist at Ameriprise Financial in Boston. "The market has the opportunity to move higher until there's evidence those factors will die out."
The S&P 500 index is trading at 13.6 times estimated 12-month earnings, compared with around 14.9 times in October 2007, when the index hit its record high, just 1.5 percent higher than Wednesday's close.
After the closing bell on Wall Street, the Dow Jones industrial average .DJI was up 42.47 points, or 0.3 percent, at 14,296.24, a record high. The S&P 500 .SPX gained 1.67 points, or 0.11 percent, to 1,541.46 and the Nasdaq Composite .IXIC dropped 1.77 points, or 0.05 percent, to 3,222.36.
The MSCI world index .MIWD00000PUS rose 0.15 percent.
U.S. dollar-traded Nikkei futures added 2.2 percent. Overnight in Asia, the Nikkei .N225 hit its highest in 4-1/2 years, helped by prospects of a reflationary policy in Japan to revive growth.
EURO, TREASURIES WEAKEN
Better-than-expected U.S. private-sector jobs figures reported by payrolls processor ADP on Wednesday dented the allure of Treasuries. The figures come two days ahead of the government's closely watched monthly payrolls report.
The benchmark 10-year U.S. Treasury note was down 13/32, the yield at a seven-day high of 1.9409 percent.
"We had ADP employment data today which surprised to the upside and that helped take (yields) higher," said Jake Lowery, Treasury trader at ING Investment Management in Atlanta.
"We have got supply coming next week, right around the corner after payrolls, and it seems that with Treasuries trading in a pretty tight range lately, more and more market participants are focusing on small opportunities around the supply calendar."
The U.S. Treasury is set to auction three-year and 10-year notes next week, along with 30-year bonds.
In currency trading, the euro fell against the U.S. dollar ahead of the ECB meeting.
"The market has turned dovish on the ECB and that kept the euro constrained," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. "While most are expecting the ECB to keep rates steady, there are a few calls for a rate cut tomorrow, including our bank."
The euro was down 0.5 percent against the greenback at $1.2988.
The dollar also strengthened against the Japanese currency, hitting a one-week high above 94 yen.
The market is turning its attention to the BoJ's April 3-4 meeting, the first policy review under its new governor, Haruhiko Kuroda, who is an advocate of aggressive monetary easing.
Copper slumped after a two-day rebound, weighed by uncertainty about metals demand in China, the world's top consumer, and economic growth in Europe.
Three-month copper fell 0.85 percent to $7,690 a ton, erasing initial gains that took it above $7,812.
Areas of concern for the global economy remain, including the Chinese government's move to cool the country's overheated property market, the possible economic impact of U.S. spending cuts and political deadlock in Italy.
Brent oil pared losses to settle down 0.5 percent at $111.06 a barrel, while U.S. crude briefly slipped below $90 before settling down 0.4 percent at $90.43.
U.S. crude oil inventories rose more than forecast last week while distillates stocks fell more than expected as refinery utilization rates posted a surprise drop, data from the Energy Information Administration showed on Wednesday.
Gold rose in late trading on expectations central banks would maintain loose monetary policy, but still in the tight price range of recent sessions.
Spot gold was up 0.5 percent $1,582.50 an ounce.
(Additional reporting by Luciana Lopez, Leah Schnurr, Ryan Vlastelica, Chris Reese and Gertrude Chavez-Dreyfuss; Editing by Dan Grebler and Leslie Adler)