Fri Mar 30, 2012 3:50pm EDT
* U.S. data shows economy is still gaining strength
* Stocks advance, on track to double-digit quarterly gains
* Euro gains on new Spanish budget, EU boost to rescue fund
* Oil up on weak dollar, expectations of tight U.S. market
By Herbert Lash
NEW YORK, March 30 (Reuters) - World stocks markets advanced o n F riday, on track to post double-digit gains for the quarter, as reports showing U.S. consumer spending and sentiment on the rise helped buoy stock prices and undercut the desire to hold bonds.
Equity, currency and government debt prices initially hovered fairly close to break-even as investors saw some weakness in the U.S. economic data, while developments in Europe kept asset prices at recent range-bound levels.
While the pace of business activity in the Midwest slowed more than expected in March as employment and new orders dropped from elevated levels, U.S. consumer confidence rebounded to its highest in more than a year this month and consumer spending increased by the most in seven months in February. .
The data, despite some conflicting signs, kept the economic outlook looking bright.
"When we take everything into account, it really suggests the economy is getting on a more sustainable path and really curbs the Fed's scope to expand monetary policy further," said David Song, a currency analyst at DailyFX in New York.
The Dow Jones industrial average was up 50.44 points, or 0.38 percent, at 13,196.26. The Standard & Poor's 500 Index was up 4.11 points, or 0.29 percent, at 1,407.39. The Nasdaq Composite Index was up 0.97 points, or 0.03 percent, at 3,096.33.
Investors flocked to consumer-oriented shares. The S&P consumer staples sector index rose 0.8 percent and the S&P consumer discretionary sector index added 0.5 percent.
"You're seeing a bit of sector rotation," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "That underscores investors are still constructive on the equity market."
European shares rose following a 3-day drop as bargain hunters scooped up cyclical mining and auto shares after the deal over the region's rescue fund.
The FTSEurofirst 300 index of top European shares closed up 0.9 percent at 1,069.03, its best first quarter in six years. The pan-regional index rose almost 7 percent for the quarter.
MSCI's all-country world equity index added 0.6 percent, pushing its gain up more than 11 percent so far this year for its best quarterly performance since the third quarter of 2010.
The euro edged higher against the dollar and the yen in choppy trading as budget cuts in Spain boosted hopes the country could stick to an austerity path even as mixed data kept trading largely range-bound.
Spain presented a budget projected to save more than 27 billion euros in 2012 through spending cuts and revenue increases, while euro zone finance ministers agreed to raise their financial firewall to contain the region's debt crisis.
Spain's budget and the rescue fund move were largely expected by markets, and a spike in the euro against the dollar faded to a more modest rise.
"We have a lot of conflicting data points, a lot of conflicting news," said Camilla Sutton, chief currency strategist at Scotia Capital. "There's no catalyst to break things out of month-long ranges."
The euro rose 0.3 percent against the dollar to $1.3336 and gained 0.8 percent to 110.48 yen.
The greenback seesawed against the yen, rising 0.5 percent to 82.80 yen.
U.S. Treasuries debt prices fell, marking the end of a tumultuous first quarter for Treasuries, which are on track for their worst three-month period since the fourth quarter of 2010.
An afternoon sell-off was led by the 30-year bond.
"The market seems to be struggling to hang in here before quarter end," said Sean Murphy, a Treasury trader at SG Americas Securities in New York.
The benchmark 10-year U.S. Treasury note fell 16/32 in price to yield 2.21 percent. The 30-year U.S. Treasury bond was down 43/32, yielding 3.34 percent.
Crude oil rose after three losing sessions, with support from a weaker dollar and expectations of tight gasoline supplies in the United States, the world's largest oil consumer.
Front-month Brent crude futures settled up 49 cents at $122.88 a barrel, recovering from their sharpest daily fall in more than three weeks.
U.S. crude futures settled up 24 cents at $103.02 a barrel after their biggest 2-day slide since mid-December.
Fears of supply disruption in the Middle East underpinned oil, but gains were capped by concerns that some Western nations will release oil stocks, increasing supply and tempering prices. There is also a focus on the untamed euro zone crisis.
"Prices are still very range-bound," said Amrita Sen at Barclays in London. "Overall prices are within a range, still constrained by fears on the upside of a strategic petroleum release and on the downside by the strong fundamentals and geopolitical concerns."
- Link this
- Share this
- Digg this
- Email
- Reprints
