Reuters: US Dollar Report: GLOBAL MARKETS-Dollar gains, U.S. shares pare losses on data

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GLOBAL MARKETS-Dollar gains, U.S. shares pare losses on data Mar 1st 2013, 16:44 Fri Mar 1, 2013 11:44am EST * Strong U.S. manufacturing data leads Wall Street rebound * Euro hovers near 2-month low vs dollar * Global shares fall as euro zone data disappoints * Lacklustre China manufacturing data hits commodities By Herbert Lash NEW YORK, March 1 (Reuters) - Global equity markets fell and the euro slumped to a two-month low on Friday as weak economic data from Europe and China weighed on prices, but Wall Street stocks rebounded on news of surprisingly strong U.S. manufacturing and consumer sentiment. Concerns about imminent U.S. spending cuts and political stalemate in Rome remained major headwinds for risky assets. The pace of growth in U.S. manufacturing rising to its fastest rate in over a year and a half in February offset some jitters. The Institute for Supply Management (ISM) said its index of national factory activity rose to 54.2 from 53.1 in January, topping economists' forecasts for a pullback to 52.5. "A very impressive ISM number with the only caution being a decline in employment though still in expanding territory," David Ader, head Of government bond strategy at CRT Capital Group in Stamford, Connecticut. Another sign of optimism was a report that showed U.S. consumer sentiment rose in February as Americans were more hopeful that the jobs market will improve, even as confidence in fiscal policy was near all-time lows. While economic data from Europe and China was disappointing, there are clear signs of economic recovery in the United States and some evidence that Japan is beginning to turn around, a potential swing factor in 2013, said Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh. "We can stand back and have a wider discussion if you wish about about politics and markets, and another discussion about whether equity prices have gotten ahead of themselves, but as of Friday it was a most reassuring number," Milligan said. The Dow Jones industrial average was up 12.44 points, or 0.09 percent, at 14,066.93. The Standard & Poor's 500 Index was up 0.34 points, or 0.02 percent, at 1,515.02. The Nasdaq Composite Index was down 3.32 points, or 0.11 percent, at 3,156.87. MSCI's all-country world equity index fell 0.32 percent to 353.38. In Europe, the FTSEurofirst 300 of leading regional companies fell 0.07 percent to 1170.67. The euro tumbled to a 2013 low against the U.S. dollar, which rose to a six-month high against a basket of currencies as weak euro zone data highlighted a growing economic disparity with the United States. The euro fell to a 2013 trough of $1.2977, its lowest since at least Dec. 11, down 0.61 percent on the day. The dollar rallied to a session high versus the Japanese yen as an array of data buoyed the safe-haven U.S. currency. The dollar rose as high as 93.48 yen, its highest since Feb. 25. It last traded at 93.42, up 1 percent on the day. U.S. Treasuries prices rose as impending U.S. budget cuts and concern about economic weakness in Europe inspired a bid for safe-haven U.S. debt. Economists say $85 billion in automatic "sequestration" cuts to federal spending, on top of fiscal restraint already in place due to the expiry of the U.S. payroll tax cut, will likely trim U.S. economic growth this year. The benchmark 10-year U.S. Treasury note was up 6/32 in price to yield 1.8584 percent. Crude oil slipped to a six-week low below $110 per barrel, weighed down by growth worries as political gridlock brought the prospect of massive U.S. government spending cuts and on disappointing European industrial data. Oil later pared losses. Brent crude for April delivery fell $1.10 to a low of $110.28 per barrel. U.S. oil fell to a low of $90.75, down $1.30. Link this Share this Digg this Email Reprints

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