August 21, 2014 / 8:30 PM / 3 years ago

GLOBAL MARKETS-Stocks extend rally, S&P at new high as data signals growth

* Spate of U.S. data provides lift to Wall Street
    * European shares, euro buoyed by robust German data
    * Crude prices rise on U.S. economic data

 (Adds close of U.S. markets)
    By Herbert Lash
    NEW YORK, Aug 21 (Reuters) - Global equity markets moved
higher on Thursday, with the S&P 500 closing at an all-time
high, as U.S. and German data drove confidence on economic
growth and helped extend a stock rally.
    Data on German private-sector growth reassured investors
about the outlook for Europe's biggest economy following a soft
patch, while U.S. data showed economic strength early in the
third quarter.
    Markit's flash composite Purchasing Managers' Index for
Germany was 54.9 for August, well above the 50 mark that
separates economic expansion from contraction, a relief after
German GDP data last week showed a surprise contraction in the
second quarter. 
    In the United States, home resales rose to a 10-month high
in July, factory activity in the mid-Atlantic region hit its
highest level since March 2011 in August and a gauge of future
economic activity grew solidly last month. 
    The benchmark S&P 500 rose as high as 1,994.76, topping the
prior record of 1,991.39 set in late July, and European markets
extended early gains. MSCI's measure of global equity
performance also rose, but its gauge of emerging
markets slipped a bit.
    "It seems that conditions reflect the best of all worlds -
U.S. economic growth that is neither too slow, which would put
pressure on earnings, nor too fast," said Terry Sandven, chief
equity strategist at U.S. Bank Wealth Management in Minneapolis.
    The Dow Jones industrial average closed up 60.36
points, or 0.36 percent, at 17,039.49. The S&P 500 rose
5.86 points, or 0.29 percent, to 1,992.37 - a new closing high -
 and the Nasdaq Composite added 5.62 points, or 0.12
percent, to 4,532.10.
    In Europe, the FTSEurofirst 300 index of top
regional shares rose 0.67 percent to close at 1,355.09.
    While stocks might be a tad pricey, earnings growth will
continue to support U.S. equities, said Bernie Williams, chief
investment officer of investment solutions at USAA Investments 
in San Antonio, Texas.
    "I'm a big believer that stocks follow earnings," Williams
said. "Right now the latest consensus is 8 or 9 percent earnings
growth, I think that's what propels the market going forward."
    The German data helped the euro rebound against the
dollar, and it rose 0.16 percent to $1.3279. Against the yen,
the dollar gained 0.08 percent to 103.81 yen. 
    U.S. Treasuries hewed to a tight range, showing little
reaction to the stronger-than-expected U.S. economic data.
Investors awaited developments from the annual meeting of
central bankers in Jackson Hole, Wyoming, which begins late
    A speech on Friday by Federal Reserve Chair Janet Yellen, in
which she is expected talk about labor markets, is highly
anticipated by investors.
    German 10-year Bund yields held below 1
percent on bets that Yellen will signal that the Fed is in no
hurry to raise rates.
    Benchmark 10-year U.S. Treasuries rose 6/32 in
price to yield 2.4068 percent. 
    U.S. crude rose and Brent futures pared losses, lifted by
the U.S. economic data after a plentiful supply picture.
    Brent crude for October rose 35 cents to settle at
$102.63 a barrel, while U.S. crude rose 51 cents to
settle at $93.96 a barrel.

 (Reporting by Herbert Lash; Additional reporting by Marc Jones
in London; Editing by Leslie Adler, Chizu Nomiyama and Dan

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