Strong data lifts dollar to 14-year high; oil falls

Tue Jan 3, 2017 5:00pm EST
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By Rodrigo Campos

NEW YORK (Reuters) - The U.S. dollar touched a 14-year high and major stock markets got off to a solid start in the new year, boosted by strong data, while debt yields edged up after upbeat economic figures out of China and Europe.

Crude oil gave up a 2 percent advance and fell more than 2 percent, restrained by the strong dollar, as U.S. factory activity accelerated to a two-year high in December amid a surge in measures of new orders and employment.

Inflation rose in Germany and France, providing the euro zone's central bank with evidence its loose monetary policy is working, while Chinese data showed the fastest factory output growth in six years.

On Wall Street, stocks rose, with all major indexes not far from their historic highs.

However, with the Dow Jones Industrial Average trading near the 20,000 mark, some investors warn that additional strong gains would be unlikely in the short term. They want to see evidence that President-elect Donald Trump's campaign-trail promises will be approved by Republican lawmakers concerned about widening the federal budget deficit.

"The president-elect can't just wave a magic wand," said Warren West, principal at Greentree Brokerage Services in Philadelphia. "He has to deal with Congress, and Congress hasn't proved to be able to agree with itself."

The Dow .DJI rose 119.16 points, or 0.6 percent, to 19,881.76, the S&P 500 .SPX gained 19 points, or 0.85 percent, to 2,257.83 and the Nasdaq Composite .IXIC added 45.97 points, or 0.85 percent, to 5,429.08.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.53 percent, while MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.33 percent.   Continued...

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015.  REUTERS/Suzanne Plunkett/File photo