World equity indexes up on U.S. data, ECB hopes; gold slumps

Tue May 27, 2014 4:45pm EDT
 
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By Angela Moon

NEW YORK, (Reuters) - World equity markets rallied on Tuesday, with the S&P 500 ending at a new record following strong U.S. economic data, while the euro softened against the dollar on expectations of more rate cuts from the European Central Bank.

Stronger-than-expected figures pressured safe-haven assets, including gold, which touched a 3-1/2 month low. Platinum also fell after South Africa's mining minister pledged to mediate in a long-running strike.

Wall Street was led by gains in financials, utilities and tech stocks. Data showed orders for long-lasting U.S. manufactured goods unexpectedly rose in April while U.S. single-family home prices also rose in March, beating expectations.

"People move out of one sector and into a different equity sector - there's always a sector picking up the slack, so that’s driving you higher," said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas. "People don't want to be out of equities."

The Dow Jones industrial average rose 69.23 points, or 0.42 percent, to 16,675.5, the S&P 500 gained 11.38 points, or 0.6 percent, to 1,911.91 and the Nasdaq Composite added 51.26 points, or 1.22 percent, to 4,237.07.

ECB chief Mario Draghi on Monday bolstered views that the bank will cut euro zone interest rates again next week, boosting appetite for risky assets. Other policymakers, including Austrian ECB board member Ewald Nowotny, drove home the message on Tuesday.

MSCI's all-world share index rose 0.2 percent to within two percentage points of its 2007 record.

Investors kept a wary eye on Ukraine, which launched air strikes and a paratroop assault against pro-Russian rebels who seized an airport on Monday. The escalation was tempered by a decisive win for billionaire Petro Poroshenko in Ukraine's weekend presidential election, which many hope will help stabilize the situation.   Continued...

 
A man is reflected on an electronic stock quotation board outside a brokerage in Tokyo May 16, 2014. REUTERS/Yuya Shino