NEW YORK (Reuters) - Major U.S. and European equity indices rallied to multi year or record highs on Thursday after a cease-fire between Russian separatists and Ukrainian forces, and surprisingly aggressive stimulus by Sweden’s central bank, cheered global markets.
U.S. Treasury prices wavered as data showed a key measure of U.S. consumer spending barely rose in January and initial claims for state unemployment benefits rose more than expected, suggesting the economy started the first quarter on a softer note.
The Nasdaq Composite surged past multi year highs reached in December to levels last seen in March 2000. The index was about 280 points from its all-time high set earlier that month marking the peak of the dot-com bubble. The benchmark S&P 500 closed just two points from its record closing high in December.
In Europe, shares reversed early losses on a broadly positive raft of results on one of the busiest days in the region’s earnings calendar.
Even Greek stocks rose sharply, with the country's main index .ATG rising 6.7 percent as investors held out hope that the new Greek government could reach a deal with international creditors over the country's bailout.
Investors also took cues from the cease-fire in Ukraine that will take effect from Feb. 15, and the Riksbank’s decision in Sweden to cut interest rates below zero and buy government debt.
“You have all these sort of overseas positives and two domestic negatives with the claims data and the retail sales data missing,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.
The cease-fire deal came shortly after the International Monetary Fund announced a new four-year funding programme for Ukraine that will total $40 billion.
MSCI's all-country world index .MIWD00000PUS rose 1.23 percent, while the FTSEuroFirst index of 300 leading shares .FTEU3 rose 0.64 percent to close at 1,493.22, a level last reached more than seven years ago.
The S&P information technology sector .SPLRCT rose 1.64 percent in its third straight daily advance. Cisco Systems (CSCO.O) climbed 9.4 percent to $29.46 in the network equipment maker’s biggest one-day jump since May 2013 after reporting earnings and revenue that beat expectations.
The Dow Jones industrial average .DJI closed up 110.24 points, or 0.62 percent, to 17,972.38. The S&P 500 .SPX rose 19.95 points, or 0.96 percent, to 2,088.48 and the Nasdaq Composite .IXIC added 56.43 points, or 1.18 percent, to 4,857.61.
Major European indexes hit multi-year highs, further boosted by encouraging corporate reports.
Sweden's benchmark OMXS30 .OMXS30 equity index hit a record high, while Germany's DAX .GDAXI rose 1.6 percent to approach record levels and France's CAC .FCHI rose 1.0 percent to its highest in about seven years.
Sterling jumped after the Bank of England raised its UK growth and inflation forecasts, while Sweden’s surprise policy decision sent the crown to a six-year low against the dollar.
Sterling rose 0.8 percent against the euro to a seven-year high of 73.715 pence EURGBP=D4, before paring gains to turn slightly lower.
The Swedish crown fell by as much 2 percent against the dollar to hit 8.5512 crowns SEK=, its weakest since April 2009, before recovering somewhat to 8.4201 to the dollar.
The price of the benchmark 10-year U.S. Treasury was little changed to yield 1.9879 percent.
Prices on Germany’s 10-year bund DE10YT=TWEB rose, pushing its yield down to 0.327 percent.
Brent crude prices rose more than $2 after two days of declines, as a weakened dollar and industry spending cuts offset oversupply worries.
U.S. crude CLc1 rose $2.37 to settle at $51.21 a barrel after dropping as much as 3 percent overnight, and Brent crude LCOc1 gained $2.29 to settle at $57.05.
Reporting by Herbert Lash; Editing by Meredith Mazzilli, Andrew Hay and Chizu Nomiyama