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GLOBAL MARKETS-Wall Street, euro zone shares rise, dollar weaker
May 30, 2013 / 2:17 PM / 4 years ago

GLOBAL MARKETS-Wall Street, euro zone shares rise, dollar weaker

* U.S. shares open higher, Treasuries prices slip before
7-year note auction
    * Dollar broadly weaker amid doubts on timing of Fed
stimulus pullback
    * Euro hits two-week high after strong confidence data
    * MSCI Asia stocks ex-Japan at six-week low, Nikkei slumps

    By Ellen Freilich
    NEW YORK, May 30 (Reuters) - U.S. stocks opened higher on
Thursday despite a rise in new U.S. jobless claims and improved
euro zone confidence data lifted European shares and the euro
after another five percent dive in Japan's Nikkei share index.
    Revised figures showed U.S. GDP grew 2.4 percent in the
first quarter, slightly less than initially reported, a sign of
pain from Washington's austerity drive. 
    U.S. stocks opened modestly higher on Thursday as the latest
economic data indicated that central bank stimulus measures
would remain intact.
    The Dow Jones industrial average was up 73.32 points,
or 0.48 percent, at 15,376.12. The Standard & Poor's 500 Index
 was up 9.89 points, or 0.60 percent, at 1,658.25. The
Nasdaq Composite Index was up 23.81 points, or 0.69
percent, at 3,491.32.
    The dollar was weaker against most major currencies,
but rose against the yen after sources told Reuters
Japan's public pensions fund was considering allowing investment
in domestic stocks. 
    The Nikkei had tumbled 5 percent to a five-week low earlier
as the recent boost provided by the Bank of Japan's record $1.4
stimulus continued to wane and as focus now turns to the Fed. 
    U.S. Treasuries were slightly lower ahead of the Treasury's
$29 billion seven-year note auction. Larger losses were pared
after U.S. Labor Department said the number of Americans filing
new claims for unemployment benefits rose last week.
    Investors in all markets are increasingly sensitive to
economic data since Federal Reserve Chairman Ben Bernanke said
last week that the U.S. central bank may taper its program of
buying Treasuries and mortgage-backed securities within the next
few policy meetings if data show the economy is gaining steam.
    Yields on Treasuries have surged this month as more upbeat
sentiment about the economy prompted investors to sell bonds  
should the Fed pull back on its massive bond purchases.
    The recent backup in rates may help the Treasury sell $29 
billion in seven-year notes on Thursday, the final sale of $99 
billion in new coupon-bearing debt this week. The government saw
strong demand on Wednesday for a $35 billion auction of 
five-year notes. 
    "Yesterday we had a real bid come back into the market. Now 
it looks like we're going to gravitate to possibly higher prices
but we do have to take this seven-year note out of the way," 
said Tom Tucci, head of Treasuries trading at CIBC in New York. 
    Benchmark 10-year notes were last down 4/32 in 
price to yield 2.13 percent. Those yields have surged from 1.61
percent at the beginning of May, and reached a 13-month high of
2.24 percent in overnight trading on Wednesday. 
    Top European stocks climbed 0.25 percent as they
steadied after heavy falls on Wednesday, but the drop in Japan's
Nikkei in Asian trading left MSCI's world index
 at a three-week low. 
    "The market is being dominated by expectations of Fed
tightening," said Daiwa securities economist Tobias Blattner.
"German government bond yields have gone up quite significantly
and after this massive rally equities are correcting to a
certain extent."
    Share gains in Europe were underpinned by a
bigger-than-expected improvement in the European Commission's
monthly economic confidence survey, which showed morale picked
up in all five of the euro zone's largest economies - Germany,
France, Italy, Spain and the Netherlands. 
    The stronger euro zone confidence data saw the euro 
drift to a two-week high of $1.2974 against the dollar as
economists revised the chances of an ECB rate cut next week.
    
    In the debt market, a small rise in Italy's borrowing costs
as it sold 5- and 10-year bonds mirrored the result of a Spanish
auction earlier in the week, adding to signs that a 10-month
fall in peripheral euro zone yields could be drawing to a close.
    German Bund futures recovered some ground after a
recent selloff.
    Commodity markets were also focused on the uncertain impact
a scale-back in Fed support would have on the global economy and
demand for natural resources, as well as for the dollar. Most
raw materials are priced in dollars.        
    London copper, which has fallen 9 percent this year,
hit a two-week low before rebounding and oil dipped back
below $102 as it stayed at the bottom of its recent range.

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