NEW YORK Global equity markets rose on Thursday after an encouraging U.S. weekly labor market report indicated a steadily improving economy, while the euro strengthened after the European Central Bank left its benchmark interest rate unchanged.
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, another sign in recent data that the labor market is picking up.
On Wall Street, U.S. stocks rose on the labor report. But European shares pared their gains when ECB President Mario Draghi was non-committal as to whether he thought equity markets were fairly priced at current lofty levels.
The euro rallied more than 1 percent as Draghi gave no hints of further easing in euro-zone interest rates after the ECB left its benchmark rate unchanged at 0.75 percent.
A growing minority of respondents in a Reuters poll - 22 of 76 - expect the ECB eventually to cut its main refinancing rate to a record low of 0.5 percent. <ECB/INT>
The Dow hit an intraday record for a third consecutive session, climbing as high as 14,354.69 after reaching uncharted territory on Tuesday. The broader S&P 500 remains more than 1 percent below its record close and intraday high set in October 2007.
Other U.S. stock indexes also hit intraday records.
The number of Americans filing initial claims for unemployment benefits unexpectedly fell to a seasonally adjusted 340,000 last week.
The market's focus turned to Friday, when the government's monthly non-farm payrolls report is expected to show the U.S. economy added 160,000 jobs in February.
"Today's move is pretty tranquil. No one is going to take big positions ahead of tomorrow's number, but the market is definitely in an uptrend," said Paul Zemsky, in charge of asset allocation at ING Investment Management in New York.
"If payrolls disappoint, we'll have a pullback, but that won't be enough to derail the rally," said Zemsky, who helps oversee $170 billion. "If the report is strong, markets still have room to grow."
The Dow Jones industrial average .DJI closed up 33.25 points, or 0.23 percent, at 14,329.49. The Standard & Poor's 500 Index .SPX rose 2.80 points, or 0.18 percent, at 1,544.26. The Nasdaq Composite Index .IXIC gained 9.72 points, or 0.30 percent, at 3,232.09.
INTRA-DAY HIGH EXTRAVAGANZA
The equity rally's sharp advance has raised concerns on both sides of the Atlantic. The Dow has climbed 15 percent from its November lows, while the FTSEurofirst 300 Index .FTEU3 of leading European shares has gained 11 percent.
The Russell 2000 Index .TOY, which measures the performance of 2,000 U.S. small-cap companies, hit an intraday record high in Thursday's session. The Russell 1000 .RUI and the Russell 3000 .RUA also climbed to record intraday highs.
"Equity markets have had a pretty significant advance over the past several months since bottoming in November. Despite generally positive market internals, there's some worry about jumping into the market at these levels," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
European shares ended slightly lower on Thursday, held back by a post-results slump for British insurer Aviva (AV.L). Some said they expected the pullback to continue in the short term.
The FTSEurofirst 300 dipped 0.07 percent to close at 1,185.17 after hitting a 4-1/2-year intraday high on Wednesday.
Five leading stock indices for Britain, Germany, France, Italy and Spain all ended the day higher.
MSCI's all-country world stock index .MIWD00000PUS eased from an intraday high for the year of 359.47, to trade up 0.14 percent.
The euro was up 1.1 percent at $1.3107 after hitting a session peak of $1.3116, a five-day high.
The ECB and the Bank of England kept interest rates on hold, as expected.
Prices for U.S. Treasuries slid as a second straight day of better-than-expected labor market data boosted appetite for riskier assets.
Benchmark 10-year Treasury notes fell 16/32 in price to yield 1.9947 percent.
Oil hovered near break-even at about $111 a barrel as the ECB gave no strong hint about monetary policy easing in the months ahead and on the better-than-expected U.S. jobs data.
Brent crude rose 9 cents to settle at $111.15 a barrel. U.S. crude futures gained $1.13 to settle at $91.56.
(Additional reporting by Richard Hubbard in London; Reporting by Herbert Lash; Editing by James Dalgleish, Jan Paschal and Dan Grebler)