GLOBAL MARKETS-Stocks, oil rebound on economic data

Tue Feb 5, 2013 5:36pm GMT

* Economic data fuels European, U.S. stock rally
    * World equity markets rebound from Monday's sharp sell-off
    * Euro lifted by above-forecast euro zone services data
    * Brent crude close to $117 a barrel


    By Herbert Lash
    NEW YORK, Feb 5 (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 last month,
while business activity in the euro zone showed signs of
recovery.
    Major U.S. and European stock indexes rallied, with Wall
Street gaining about 0.8 percent, after a sharp sell-off the
previous session on renewed worries about the euro zone crisis.
    A measure of world equity markets also was higher, though
only slightly as emerging market shares declined.
    U.S. and European stocks advanced, fueled by strong
fourth-quarter earnings and signs of improving economic growth,
which suggested the longer-term trend for equities remains
higher. 
    "Yesterday's spotlight on Southern Europe was just an excuse
to book profits and catch our breath. The trend is still
positive, and clients are slowly coming back to equities," said 
Patrice Peroise, a trader at Kepler Capital Markets.
    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.
    Tuesday'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 five-year highs.
 
    In the biggest leveraged buyout since the financial crisis,
Michael Dell reached a deal to take computer maker Dell Inc
 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.
    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 was up 105.14
points, or 0.76 percent, at 13,985.22. The Standard & Poor's 500
Index was up 12.68 points, or 0.85 percent, at 1,508.39.
The Nasdaq Composite Index was up 30.72 points, or 0.98
percent, at 3,161.88. 
    MSCI's all-country world equity index rose
0.2 percent to 354.77, while the FTSEurofirst 300 index
of top European shares closed up a provisional 0.3 percent at
1154.47.
    U.S. Treasuries prices fell, spurred by Markit's Eurozone
Composite PMI, which rose to a 10-month high of 48.6 from 47.2
in December - better than the preliminary reading of 48.2. The
data is based on business activity across thousands of companies
and is considered a good gauge of growth. 
    The benchmark 10-year U.S. Treasury note was
down 14/32 in price to yield 2.0052 percent.
    Brent crude oil rose $1.32 a barrel to $116.92,
while U.S. crude futures gained 63 cents to $96.80.
    "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 0.39 percent to trade at $1.3566.