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GLOBAL MARKETS-Stocks up on China, US data; oil off after storm

by on November 1, 2012 4:39 pm GMT
 

Thu Nov 1, 2012 12:39pm EDT

* Data on China's factories, U.S. jobs boost equities
    * U.S. Treasuries lower a day before key U.S. payrolls
report
    * Oil falls on demand fears in wake of Sandy's destruction


    By Herbert Lash
    NEW YORK, Nov 1 (Reuters) - Stocks on major markets rose on
Thursday after data showed China's economy regaining some
traction and there were signs of improvement in the U.S. labor
market, while oil prices slipped on concern about the impact on
demand from the storm in the U.S. Northeast.
    There was renewed optimism about China, the world's
fastest-growing economy, after official and private-sector
factory surveys marked gains. China's official Purchasing
Managers Index for October showed gains in factory activity for
the first time since July. 
    In the United States, payrolls processor ADP reported that
private employers added jobs in October at the fastest pace in
eight months, a sign of modest healing in the labor market,
while other data showed a sharp improvement in consumer
confidence. 
    A drop in new claims for jobless benefits last week also was
encouraging, though there were mixed signals regarding the
health of U.S. manufacturing.
    "There is a general trend of things getting more positive,
which should help stocks and the economy at large going
forward," said Bruce McCain, chief investment strategist at Key
Private Bank in Cleveland.
    All three major gauges of U.S. stock activity rose more than
1 percent.
    In Europe, the FTSE Eurofirst index of top European
shares gained 1.2 percent at 1,109.34. 
    MSCI's all-country world equity index gained
0.8 percent to 331.65.
    The Dow Jones industrial average was up 147.20
points, or 1.12 percent, at 13,243.66. The Standard & Poor's 500
Index was up 15.16 points, or 1.07 percent, at 1,427.32.
The Nasdaq Composite Index rose 1.47 percent, or 43.69
points, to 3,020.92.
    U.S. Treasuries prices fell after the official and private
Chinese PMI manufacturing surveys for October showed signs of
improvement in China's economy. 
    China's central bank also conducted its largest-ever net
fund injection this week. The move signaled its intention to
keep money market conditions relatively loose and support
lending to the real economy before a once-in-a-decade political
transition, starting on Nov. 8 at the 18th Party Congress.
    "The main reason Treasuries were down is that the Chinese
central bank continues to inject record levels of liquidity into
the market and the China PMI was better than expected," said
Steven Van Order, fixed-income strategist at Calvert Investment
Management in Bethesda, Maryland.
    The benchmark 10-year U.S. Treasury note was
down 9/32 in price to yield 1.726 percent. 
    The euro surrendered gains versus the dollar to trade
slightly lower. The euro was down 0.12 percent at
$1.2942. 
    Brent crude oil futures fell to $108 a barrel as investors
analyzed the aftermath of super storm Sandy.
    The destruction wrought by the storm affected millions of
people across the eastern United States and could dampen fuel
demand just as the world's largest economy was showing signs of
recovery, analysts said.
    "Many refineries are still out or with low runs so a build
in crude oil inventories is expected next week and a draw on
diesel, heating oil with gasoline moving sideways because no
cars are moving," said Michael Poulsen, oil analyst at Global
Risk Management in Copenhagen.
    Brent crude futures slipped 52 cents to $108.18 a barrel.
     But in New York,  U.S. futures gained on
larger-than-expected crude oil stock draws and U.S.
manufacturing data. U.S. crude future rose 78 cents to $87.02 a
barrel.
    Crude inventories fell 2.05 million barrels, compared with a
forecast build of 1.5 million barrels. Distillate stockpiles
slipped less than expected, down by 93,000 barrels. Gasoline
inventories rose by 935,0000 barrels, against forecasts for a
200,000 barrel rise.