* U.S. jobless claims drop supports stocks, weighs on bonds
* China, Europe PMIs positive for sentiment
* Apple disappoints, but Netflix jumps after results
* Yen resumes months-long weakening against dollar, euro
By Ellen Freilich
NEW YORK, Jan 24 World stock markets rose on
Thursday and U.S. stocks extended a six-day rally, sailing
through the headwind of a revenue miss from Apple, while the yen
resumed its drop and oil prices gained.
The broad S&P 500 and the Dow Jones industrials stock market
indices both advanced. The Nasdaq composite index was lower, but
the entire loss - and more - was due to the drag from a 9.8
percent drop in the value of Apple.
MSCI's world equity index rose 0.28 percent
and Europe's FTSE Eurofirst 300 index gained 0.25
Business surveys released on Thursday showed growth in
Chinese manufacturing accelerated to a two-year high in January
and a buoyant Germany was leading the euro zone toward recovery.
But they also revealed France was sliding back into recession.
The Dow Jones industrial average was up 79.69 points,
or 0.58 percent, at 13,859.02. The Standard & Poor's 500 Index
was up 5.33 points, or 0.36 percent, at 1,500.14. The
Nasdaq Composite Index was down 5.09 points, or 0.16
percent, at 3,148.58.
The stock market's continued strength and news that the
number of Americans filing new claims for jobless benefits hit a
five-year low last week weighed on safe-haven U.S. debt.
The benchmark 10-year Treasury note, up 4/32 in
price before the jobless claims report, subsequently fell 10/32,
yielding 1.8631 percent, as investors moved funds into stocks.
"It's a reach for return in the equities market," said Todd
Colvin, senior vice president of global institutional sales with
R.J. O'Brien & Associates in Chicago. "Risk takers are being
rewarded so far this year."
For the euro zone as whole, January's flash euro zone
purchasing managers index pointed to more weakness ahead for a
region already mired in recession. But it also pointed to
improvement later in the year.
"The main story is that the pace of recession is clearly
easing," said Marco Valli, chief euro zone economist at
The data showed the contrasting fortunes of Germany and
France, with German activity at its strongest levels in a year
and the French PMI at its lowest level since March 2009.
"The current gap between the German and French composite PMI
indices is unprecedented," said Ken Wattret, chief euro zone
economist at BNP Paribas.
That gap helped lift German bond prices to a three-week
high, a move supported by Spanish figures showing another record
high unemployment rate and a rising tide of bad bank loans.
French bonds were seemingly unaffected by the data, with the
10-year bond yield 2 basis points lower on the day at 2.11
Investors in British stocks shrugged off worries about
Europe and focused on the better Chinese data and its
implications for mining companies. That pushed London's FTSE 100
up 1.08 percent.
China's HSBC flash purchasing managers' index rose to 51.9
in January, a two-year high, signaling a rebound in
manufacturing and confirming a recovery in growth in the world's
second-largest economy was on track.
The growing confidence in the pace of China's economic
recovery helped keep Brent crude oil above $113 a barrel
and copper at $8,099 a tonne, while gold slipped to
$1,670.14 an ounce.
In the currency markets, the yen posted steep losses
across the board after three days of gains, hurt by Japan's
record trade deficit and comments from a Japanese economic
official saying the government has no problem with the dollar
hitting 100 yen.
The euro, meanwhile, rose against the dollar after economic
data from Germany indicated the worst of the euro zone debt
crisis may have passed. But the yen drew the most attention.
Traders cited reports quoting Deputy Economy Minister
Yasutoshi Nishimura as saying the yen's decline is not
over and a dollar/yen level of 100 would not be a concern.
"(Nishimura) represents another official voice favoring
further yen weakness and the remarks probably supported the
latest bounce in dollar/yen, which began overnight," said Bob
Lynch, chief currency strategist at HSBC in New York.
The dollar was last up 1.4 percent at 89.84 yen,
rallying from a one-week low of 88.06 yen hit the previous day.
The yen's weakness became further entrenched after Prime
Minister Shinzo Abe said he expected the Bank of Japan to
achieve its 2 percent inflation goal as soon as possible.
The yen rebounded earlier this week after the Bank of
Japan disappointed investors who were expecting an immediate
increase in its asset-purchasing program. Still, the BoJ
delivered its most aggressive policy easing yet to snap the
economy out of years of stagnation.
The euro was up 0.3 percent against the dollar at
$1.3355, not far from an 11-month high hit on Jan. 14. The euro
was up 1.6 percent against the yen at 119.92 yen.
Analysts said an influential German Ifo survey due on
Friday, along with an announcement on bank plans to repay loans
taken from the European Central Bank a year ago, would sway the
euro in the coming days.