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GLOBAL MARKETS-US, Europe stocks up; forex trade choppy

Published 02/18/2010, 01:04 PM
Updated 02/18/2010, 01:09 PM

* US stocks edge higher on mixed data, Wal-Mart limits

* Stocks in Europe close higher on positive earnings

* Dollar trade choppy as oil, commodities advance (Recasts, updates U.S. and European prices, changes byline)

By Luciana Lopez

NEW YORK, Feb 18 (Reuters) - U.S. stocks inched higher on Thursday and European stocks rose for a fourth straight session after better-than-expected growth in regional U.S. factory activity boosted confidence in the economic outlook, curbing demand for safe-haven U.S. government debt.

The dollar managed to rise versus the euro as the positive factory data competed against an unexpected rise in first-time U.S. jobless claims in the latest week for investor sentiment. Concerns about the outlook for the euro zone damped sentiment against the euro.

U.S. Treasuries prices fell after the government announced a record amount of bonds for its auctions next week.

The Philadelphia Federal Reserve Bank's mid-Atlantic factory survey showed greater-than-expected growth in February as new orders surged. And private research group the Conference Board's reported that its index of leading economic indicators rose for the 10th month to a record high in January. For details, see [ID:nN18189836][ID:nN18191191]

"The big news is that we've noticed that manufacturing numbers do show things continue to improve, much like most of the economic data," said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

The Dow Jones industrial average <.DJI> was up 18.59 points, or 0.18 percent, at 10,327.83. The Standard & Poor's 500 Index <.SPX> was up 0.90 points, or 0.08 percent, at 1,100.41. The Nasdaq Composite Index <.IXIC> was up 1.92 points, or 0.09 percent, at 2,228.21.

Shares of natural resources companies, including miners, were among the biggest gainers, followed by technology companies and major manufacturers.

A weak outlook from Wal-Mart Stores Inc, the world's biggest retailer, limited gains. The company forecast results for the current quarter that could miss Wall Street estimates. [ID:nN16220499]

In Europe, the FTSEurofirst 300 <.FTEU3> index of leading European shares closed 0.65 percent higher at 1,021.66 points, after gaining 2.8 percent in the previous three sessions. For details see [ID:nLDE61H1UU]

Swiss engineering group ABB soared 7.64 percent after fourth-quarter results, while Capgemini , Europe's largest computer consultancy, rose 6.19 percent after reporting earnings ahead of forecasts.

The MSCI world equity index <.MIWD00000PUS> dipped 0.06 percent to 289.79, a loss of 0.17.

Foreign exchange markets saw choppy trading on the varied data. The dollar edged up against a basket of major currencies as measured by the ICE Futures Exchange's dollar index <.DXY>, up 0.32 percent at 80.632 from a previous session close of 80.376.

The euro was down 0.24 percent at $1.3573 from a previous session close of $1.3605. Against the Japanese yen, the dollar was down 0.10 percent at 91.27 from a previous session close of 91.360.

U.S. Treasuries fell as investors focused on the positive economic data and the government announced its auctions for next week.

The government said it would auction a record $126 billion in coupon debt next week, including the first sale of 30-year Treasury Inflation Protected Securities.

Though the supply figures were in line with expectations, they still weighed on the market as traders sought to push down prices to attractive levels for the auctions.

"The U.S. government is going to continue to have refunding needs, so if you don't like the price now, wait until next month or whenever; we will see more concessions going forward," said Michael Skinner, a bond trader at Wall Street Access in New York.

The benchmark 10-year note was last down 17/32 in price, yielding 3.80 percent versus Wednesday's close of 3.73 percent.

The 30-year long bond was down nearly a point in price, last trading 28/32 lower on the day, yielding 4.76 percent.

Worries over the fiscal stability of Greece, which have rattled investors worldwide in recent weeks, continued to weigh.

The premium investors demand to hold 10-year Greek sovereign debt rather than Germany's rose to a one-week high of around 338 basis points.

Greece, whose debt mountain is set to reach 120 percent of gross domestic product, needs to sell some 53 billion euros in debt this year, including at least 20 billion in April and May, and is looking for EU support to reduce its borrowing costs.

Bund futures fell 23 ticks, but two-year euro zone government bond yields fell as low as 0.958 percent, the lowest since the euro's inception, due to expectations euro zone interest rates would stay low for longer.

Japan's Nikkei stock average <.N225> added 0.3 percent on Thursday, its highest close in two weeks, as Hong Kong share markets were nearly flat on Thursday. [ID:nTOE61H02S] (Additional reporting by Jennifer Ablan and Natsuko Waki; Editing by Leslie Adler)

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