NEW YORK A global equities index rose on Thursday, boosted by renewed confidence that major central banks will keep taking steps to support their economies, while the euro declined against the dollar.
The political stalemate in Italy, along with looming U.S. federal budget cuts, weighed on the euro.
Pledges by the European Central Bank and U.S. Federal Reserve this week to sustain steps to inject liquidity into markets have propped up equities.
U.S. stocks, however, ended the day down slightly after a two-day rally. Earlier in Thursday's session, the Dow Jones industrial average came within 50 points of its all-time intraday high.
"To push through to new highs, you would have to see consistent positive economic data in the U.S. and have Europe stabilize - those are two pretty big requirements," said Jeff Morris, head of U.S. equities at Standard Life Investments in Boston.
"It wouldn't surprise me to see us bounce around as we have the past couple of weeks," Morris added.
A drop in new U.S. claims for jobless benefits last week and a sharp rise in factory activity in the Midwest in February added to recent data that suggests the U.S. economy is improving.
The U.S. Commerce Department said gross domestic product rose 0.1 percent in the fourth quarter - reversing a previous reading showing a contraction, but less than the 0.5 percent gain forecast by analysts in a Reuters poll.
MSCI's all-country world equity index rose 0.5 percent, while in Europe, the FTSEurofirst 300 index of top regional shares rose 0.9 percent to close at 1,171.47.
On Wall Street, the Dow fell 20.88 points, or 0.15 percent, to end at 14,054.49. The Standard & Poor's 500 Index was down 1.31 points, or 0.09 percent, at 1,514.68. The Nasdaq Composite Index was down 2.07 points, or 0.07 percent, at 3,160.19.
The Dow at one point in the session touched 14,149.15, within 50 points of its record intraday high.
The Dow Jones Transportation Average, seen as a bet on future growth, is up 12.9 percent this year, and the 20-stock index hit a record intraday high earlier on Thursday.
The euro declined against the dollar, last trading at $1.3062, down 0.57 percent on the day, but still above the session low $1.3054.
The euro's upside is seen as limited by concerns that political instability will stall Italian economic reforms and reignite the euro-zone debt crisis.
In the United States, automatic across-the-board spending cuts, known as sequestration, will be introduced on Friday. Many economists expect the budget cuts may reduce U.S. economic growth by around half a percentage point.
CRUDE ENDS DOWN, U.S. BONDS UP
In oil markets, Brent crude fell to a six-week low, capping a month-end sell-off in which prices have fallen by almost $8 in two weeks as concerns have resurfaced about the global economy and the strength of demand.
Despite initially pushing higher early in the session, Brent eventually succumbed to another wave of selling. Brent crude for April delivery closed down 49 cents at $111.38 a barrel, having earlier touched a low of $110.87, the weakest level since January 18. For the month, Brent lost 3.6 percent in February.
U.S. crude fell 71 cents to $92.05 a barrel.
Gold fell more than 1 percent and ended February with its fifth straight monthly drop, the longest string of monthly declines since 1996. Spot gold fell 1.1 percent to $1,578.86 per ounce.
U.S. Treasuries ended slightly higher in price as the potentially growth-damping impact of prospective U.S. government spending cuts fed the bid for safe-haven U.S. debt.
The benchmark 10-year U.S. Treasury note gained 6/32 in price to yield 1.879 percent.
(Additional reporting by Herbert Lash, Gabriel Debenedetti, Julie Haviv and Karen Brettell; editing by James Dalgleish, Jan Paschal, Leslie Adler and Dan Grebler)