NEW YORK (Reuters) - Global equity markets rose on Thursday after an encouraging U.S. weekly labor market report suggested a steadily improving economy, while the euro strengthened after the European Central Bank left its benchmark interest rate unchanged.
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting a pick-up in the labor market recovery and economic growth.
Equities on Wall Street rose on the labor report, but European shares pared their gains when ECB President Mario Draghi was non-committal as to whether he felt equity markets were fairly priced at current lofty levels.
The euro rallied about 1 percent as Draghi gave no hints of further easing in euro zone interest rates after the ECB left its benchmark rate unchanged.
A growing minority of respondents in a Reuters poll - 22 out of 76 - expect the ECB to eventually cut its main refinancing rate to a record low of 0.5 percent from the current 0.75 percent.
The Dow hit an intraday record for the third session in a row, climbing as high as 14,354.69 after initially breaking into uncharted territory on Tuesday. The broader S&P 500 remains more than 1 percent below its record close set in October 2007.
The number of Americans filing initial claims for those benefits unexpectedly fell to a seasonally adjusted 340,000 last week, suggesting an improving labor market.
“It’s certainly welcoming to the market and it’s once again supporting the thought that the economic recovery is strengthening despite the stalemate in budget talks, etc,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. LLC in New York.
The Dow Jones industrial average was up 47.78 points, or 0.33 percent, at 14,344.02. The Standard & Poor’s 500 Index was up 3.66 points, or 0.24 percent, at 1,545.12. The Nasdaq Composite Index was up 10.99 points, or 0.34 percent, at 3,233.36.
The equity rally’s sharp advance has raised concerns on both sides of the Atlantic. The Dow is up more than 9 percent so far this year.
“Equity markets have had a pretty significant advance over the past several months since bottoming in November. Despite generally positive market internals, there’s some worry about jumping into the market at these levels,” said Michael Sheldon, chief market strategist, RDM Financial, Westport, Connecticut.
European shares ended slightly lower on Thursday, held back by a post-results slump for British insurer Aviva, and some said they expected the pullback to continue in the short term.
The FTSEurofirst 300 index of leading regional shares, provisionally closed down 0.1 percent at 1,185.26 after hitting a 4-1/2-year intraday high on Wednesday,
Five leading stock indices, for Britain, Germany, France, Italy and Spain, all ended the day higher.
MSCI’s all-country world stock index eased from a new intraday high for the year of 359.47, to be up 0.13 percent on the day.
The euro was up 1.1 percent at $1.3107 after hitting a session peak of $1.3116, a five-day high.
The ECB and the Bank of England kept interest rates on hold, as expected.
Prices for U.S. Treasuries slid as a second straight day of better-than-expected labor market data boosted appetite for riskier assets.
Benchmark 10-year Treasury notes fell 13/32 in price to yield 1.98 percent.
Oil hovered near break-even at about $111 a barrel as the ECB gave no strong hint about monetary policy easing in the months ahead and on the better-than-expected U.S. jobs data.
Brent crude fell 21 cents at $110.85 a barrel. U.S. WTI crude futures rose 68 cents to $91.11.
Additional reporting by Richard Hubbard in London; Reporting by Herbert Lash; Editing by James Dalgleish