* U.S stocks near record high
* Euro climbs to near 14-month high, yen slides further
* Factory activity improves globally, U.S. employment
NEW YORK, Feb 1 Major world stock markets
climbed to their highest levels in nearly two years on Friday,
helped by manufacturing and employment data indicating the
global economic recovery is on track.
The euro rose to its highest level against the U.S. dollar
since mid-November 2011 after data showed euro zone factories
had their best month in January in nearly a year. The yen fell
to a two-and-a-half-year low against the dollar and a 33-month
trough versus the euro, extending its recent weakness on bets
the Bank of Japan will ease monetary policy further.
The MSCI world equity index was up 0.7
percent, helped by surveys indicating Chinese factory output was
recovering, while German industrial output posted its best month
in nearly a year, though the euro zone as a whole continued to
U.S. data showed employment grew modestly in January and
factory activity touched a nine-month high. Payrolls rose by
157,000 last month and revisions showed 127,000 more jobs
created in November and December than previously reported.
Separately, the Institute for Supply Management said its index
of national factory activity rose to 53.1 last month, the
highest level since April, from 50.2 in December.
Other data on Friday also suggested that the surprise
contraction in U.S. economic activity in the last three months
of 2012 was largely a fluke, not a trend.
"There's a lot of money looking for a home and people are
finally deciding the bond market is done and moving money into
equities," said Edward Simmons, managing director and partner at
HighTower in Portland, Maine.
The Dow Jones industrial average was up 147.82
points, or 1.07 percent, at 14,008.40. The Standard & Poor's 500
Index was up 14.90 points, or 0.99 percent, at 1,513.01.
The Nasdaq Composite Index was up 36.87 points, or 1.17
percent, at 3,179.00.
The gains are the fastest start to the year for equities in
European shares inched up as investors took advantage of the
past two sessions' losses to snap up cheapened equities,
reassured by the run of solid data from China, Europe and the
The pan-European FTSEurofirst 300 closed 0.3
percent higher at 1,168.08, clawing back some of the retreat
suffered in the previous two sessions and edging toward a 2-year
peak of 1,178.55 set earlier in the week.
"Providing there are no further setbacks to the region's
debt crisis, these data add to the expectation that the euro
zone is on course to return to growth by mid-2013," said Chris
Williamson, chief economist at data compiler Markit.
The euro was up 0.7 percent at $1.3670, with its
session high at $1.3711. The currency also hit its highest point
against the yen since April 2010, helped by factory
activity data showing the worst of the euro zone's downturn may
"The latest data is a great mix for a broadening of the 'risk
on' trade," said Alan Ruskin, head of G10 FX strategy at
Deutsche Bank in New York.
The benchmark 10-year U.S. Treasury note was
down 9/32, the yield at 2.0158 percent. Prices for U.S.
Treasuries seesawed on Friday after the slight rise in the
unemployment rate was checked by a separate report showing U.S.
manufacturing growth picked up in January.
Gold was up 0.4 percent at $1,669.66 an ounce,
although it pared gains in the wake of the U.S. payrolls data.
Silver was up 1.7 percent at $31.96 an ounce and
three-month copper on the London Metal Exchange rose to $8,310 a
tonne, its highest since early October.
In the oil market the rising economic optimism coupled with
tension across the Middle East, the world's biggest oil
producing region, has put Brent crude on track to its
biggest weekly gain since mid-November, while U.S. crude is set
to rise for an eighth straight week.
Brent oil was up 1 percent to $116.73, while U.S.
crude futures rose 12 cents to $97.61 a barrel.