Global shares rise as weak data again backs ECB rate cut

Wed Apr 24, 2013 4:56pm EDT
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By Herbert Lash

NEW YORK (Reuters) - Global equity markets rose on Wednesday on strong corporate earnings and speculation the European Central Bank will cut interest rates next week, while U.S. government debt edged up on safe-haven demand after unexpectedly weak economic data.

Wall Street closed little changed after the Commerce Department reported U.S. durable goods recorded their biggest drop in seven months in March, which tempered enthusiasm over what has so far been a relatively robust U.S. earnings season.

A gauge of planned business spending rose modestly, pointing to a slowdown in U.S. economic activity, which also weighed on U.S. equities and boosted the appeal of government debt.

Recent disappointing data in the United States, Europe and China has fueled bets of a spring global slowdown for a third straight year and forced central banks to take action.

"Poor economic data could lead to some enhanced action from central banks, which has been bullish for stocks and other risk assets" and limited a further decline in Treasury yields, said Mike Lorizio, head of Treasuries trading at Manulife Asset Management in Boston.

The Dow Jones industrial average .DJI closed down 43.16 points, or 0.29 percent, at 14,676.30. The Standard & Poor's 500 Index .SPX gained 0.01 points, or 0.00 percent, at 1,578.79. The Nasdaq Composite Index .IXIC rose 0.32 points, or 0.01 percent, at 3,269.65.

The market is trapped in a trading range, leaving investors with the choice of betting on stimulus from the Federal Reserve or the poor economic outlook, said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

"Until we get a better news flow here and overseas, it will be hard to get more enthusiasm to drive the market higher," he said of the trend in the equity market.   Continued...

Traders work on the floor at the New York Stock Exchange, April 22, 2013. REUTERS/Brendan McDermid