Stocks up on strong U.S. service sector report
By Herbert Lash
NEW YORK (Reuters) - Global equities markets rose on Wednesday on data showing the pace of growth in the U.S. service sector surged in July to a decade high, as well as being boosted by solid corporate results in Europe, while the dollar teetered as investors gauged the likelihood of a September interest rate hike.
The U.S. Institute for Supply Management's services sector index rose to 60.3, its highest reading since August 2005, on sharp increases in business activity, employment and new orders. It beat expectations for a 56.2 reading. A reading above 50 indicates growth.
The data backed views the Federal Reserve will raise rates in September after weaker-than-expected U.S. private hiring figures for July released earlier in the day kindled doubts about a rate hike next month.
The market reflected "a modest bounce back after discernable pressure over the last trading sessions," said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.
The dollar mostly rose, supported by comments from Atlanta Federal Reserve President Dennis Lockhart, who is regarded as a centrist policymaker. Lockhart, in an interview on Tuesday, put September back on the table for the first U.S. rate rise in almost a decade.
Lockhart told The Wall Street Journal it would take "significant deterioration" in the U.S. economy for him to not support a rate hike next month.
Against the yen JPY=, the greenback rose to a two-month high, gaining 0.39 percent to 124.87. The U.S. dollar index .DXY slipped 0.02 percent at 97.916. The euro EUR= gained 0.17 percent to $1.0898, reversing earlier losses.
Wall Street mostly rose, but the Dow industrials fell even though gainers outpaced declining shares by 2 to 1. Shares of Dow component Walt Disney Co (DIS.N: Quote) plunged 9.1 percent, the shares' largest single-day decline since 2008. Disney cut the profit forecast for its cable networks unit, spooking the entire industry. Continued...