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GLOBAL MARKETS-Shares, dollar rise on signs of global recovery
January 8, 2014 / 4:20 PM / 4 years ago

GLOBAL MARKETS-Shares, dollar rise on signs of global recovery

* MSCI world equity index edges higher

* Strong U.S. trade data boosts dollar

* U.S. government debt hurt by ADP jobs report

By Herbert Lash

NEW YORK, Jan 8 (Reuters) - Global equity markets and the dollar edged higher on Wednesday as a pick-up in private sector jobs in the United States and solid German economic data provided further evidence of an increase in worldwide growth.

U.S. private employers added a bigger-than-expected 238,000 jobs in December, the strongest increase in 13 months, a report by payrolls processor ADP showed.

In Germany, exports rose for the fourth consecutive month in November and industrial orders surged more than expected - mostly based on overseas demand - in a sign that Europe’s largest economy is benefiting from a nascent global upturn.

An MSCI world equity index that tracks shares in 45 countries rose 0.16 percent to a five-and-a-half year high before backing off that peak. Overnight in Japan, the Nikkei jumped 1.9 percent to approach a six-year peak.

ADP’s National Employment Report also revised November’s job gains higher, coming two days before the government’s nonfarm payroll report. That report is more comprehensive as it includes both public and private sector employment.

“ADP’s number is consistent with other labor numbers we have gotten,” said Guy Berger, U.S. economist at RBS Securities in Stamford, Connecticut.

“It is conceivable that by the end of year, we could see the unemployment rate fall below 6.5 percent,” he said. “That would be consistent with the (Federal Reserve‘s) projected pace of tapering this year.”

The Dow Jones industrial average fell 85.77 points, or 0.52 percent, at 16,445.17. The Standard & Poor’s 500 Index was down 1.71 points, or 0.09 percent, at 1,836.17. The Nasdaq Composite Index was up 10.17 points, or 0.24 percent, at 4,163.35.

The pan-European FTSEurofirst 300 index of leading European shares was flat in a see-saw session.

The dollar gained against the yen, euro and a basket of currencies.

The dollar rose 0.26 percent to 104.87 yen and firmed against the euro, with the single currency last trading 0.1 percent lower at $1.3502.

Against a basket of six major currencies, the dollar reached a six-week high of 81.048 and was last up 0.21 percent on the day at 81.007.

Crude oil prices were down slightly.

Brent crude for delivery in February edged down 5 cents to $107.30 a barrel, after settling up 62 cents on Tuesday.

U.S crude fell 73 cents at $92.94 a barrel.

U.S. Treasuries prices fell on the ADP report. The U.S. Treasury 10-year note fell 17/32 in price to yield 3.0006 percent.

Signs of a U.S. recovery have reassured some investors that the world’s biggest economy can withstand the Federal Reserve’s decision to scale down its bond-buying program. The program drove many investors into equities by curtailing returns on cash and bonds, helping fuel much of last year’s stock market rally.

Minutes of the Fed’s December meeting are due later on Wednesday, and markets are hoping for a clear commitment to keeping rates low for a long time.

The European Central Bank meets on Thursday. Analysts and investors doubt it will do more than flag its readiness to act in the future, despite another surprising fall in euro zone inflation.

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