World stocks, oil rebound on economic data

NEW YORK Wed Feb 6, 2013 3:12am IST

Barclay's specialist trader Michael Pistillo (R) gives a price to trader Salvatore Suarino on the floor of the New York Stock Exchange, February 5, 2013. REUTERS/Brendan McDermid

Barclay's specialist trader Michael Pistillo (R) gives a price to trader Salvatore Suarino on the floor of the New York Stock Exchange, February 5, 2013.

Credit: Reuters/Brendan McDermid

Related Topics

Stocks

   

NEW YORK (Reuters) - Global equity markets and oil prices bounced back on Tuesday after data showed the vast U.S. services sector extended a three-year expansion in January, while business activity in the euro zone showed signs of recovery.

U.S. and European stocks rallied, with the S&P 500 and Nasdaq gaining more than 1 percent, recouping most of their losses after a sharp sell-off the previous session that was sparked by renewed worries about the euro zone crisis.

A measure of world equity markets also was higher, though only slightly, because of a decline in emerging market shares.

Strong fourth-quarter earnings and signs of improving economic growth suggested the trend for equities remains higher.

"Yesterday was the first real down day of the year, which shows that we are in this strong bull market. Today we are back to the normal pattern. People are realizing that we've over-reacted to Europe yesterday," said Uri Landesman, president of hedge fund Platinum Partners in New York.

The Institute for Supply Management said its U.S. services sector index eased slightly, to 55.2 last month from 55.7 in December. The reading was in line with economists' forecasts, according to a Reuters survey.

In Europe, Markit's Eurozone Composite PMI, based on business activity across thousands of companies and a good gauge of economic growth, rose in January to a 10-month high of 48.6 from 47.2 the previous month.

The day's data bolstered the view that the world economy was improving, a sentiment that has lifted stock markets around the globe and pushed the benchmark U.S. S&P 500 to a fresh five-year intraday high on Tuesday.

In the biggest leveraged buyout since the financial crisis, Michael Dell reached a deal to take computer maker Dell Inc DELL.O private for $24.4 billion. The move will allow the billionaire chief executive to try to revive the fortunes of his company without Wall Street scrutiny.

Dell shares closed up 1.1 percent at $13.42.

Corporate results also helped the rally. With 56 percent of S&P 500 companies reporting, 68.7 percent posted earnings that beat expectations, or better than the 65 percent rate over the past four quarters or the 62 percent pace since 1994.

The Dow Jones industrial average closed up 99.22 points, or 0.71 percent, at 13,979.30. The Standard & Poor's 500 Index rose 15.58 points, or 1.04 percent, at 1,511.29. The Nasdaq Composite Index gained 40.41 points, or 1.29 percent, at 3,171.58.

MSCI's all-country world equity index rose 0.28 percent to 354.97, while the FTSEurofirst 300 index of top European shares closed up 0.3 percent at 1,154.47.

U.S. Treasuries prices fell. The benchmark 10-year U.S. Treasury note was down 17/32 in price to yield 2.016 percent.

Brent crude oil rose 92 cents a barrel to settle at $116.52, while U.S. crude futures settled up 47 cents at $96.64.

"We do not envisage prices receding for any great length of time," said Carsten Fritsch, an analyst at Commerzbank. "The supply-side risks still prevailing, shrinking OPEC supplies and the brightening global economic outlook all suggest that such a retreat is unlikely."

The euro rose against the dollar and yen, returning to its months-long trend of appreciation, as better-than-expected euro zone data affirmed expectations that the European Central Bank will keep policy steady when it meets this week.

The euro, which had taken the brunt of the selling and fallen from a high of over $1.37 at the end of last week to under $1.35 on Monday, rose 0.49 percent to trade at $1.3579.

(Additional reporting by Richard Hubbard in London; Editing by Dan Grebler and Nick Zieminski)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Banking Sector

Banking Sector

India's laggard state lenders face tough sell on capital raising plan  Full Article 

Falling Oil Prices

Falling Oil Prices

Saudis signal no push for oil cut as market to "stabilise itself"  Full Article 

Raising Stake

Raising Stake

Nippon Life to raise stake in Reliance Capital fund unit  Full Article 

Sterilisation Camps

Sterilisation Camps

Sterilisation targets remain in all but name, critics say  Full Article 

Share Buyback

Share Buyback

Samsung Electronics to buy back $2 billion in shares  Full Article 

Bird Flu Scare

Bird Flu Scare

India orders culling after bird flu outbreaks in Kerala.  Full Article 

Microsoft in China

Microsoft in China

Microsoft to pay China $140 million for 'tax evasion'   Full Article 

Flashback: 26/11

Flashback: 26/11

The three-day attack in November 2008 left 166 dead.  Slideshow 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage