Dow near record amid global market recovery

Financial market mood perks up amid welter of positive global economic news; Dow near record

Associated Press
Dow near record amid global market recovery
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A man looks at his watch while walking in front of an electronic stock indicator in Tokyo, Thursday, Feb. 28, 2013. Asian stock markets rose Thursday as positive economic indicators and the nomination of a pro-stimulus Bank of Japan chief bolstered hopes for faster growth. The Nikkei 225 stock average closed at 11,559.36, up 2.7 percent. (AP Photo/Shizuo Kambayashi)

LONDON (AP) -- Markets are ending the month in upbeat fashion Thursday, with the Dow Jones industrial average within striking distance of its all-time record high despite the prospect of spending cuts by the U.S. government.

Sentiment was shored up by hopes over the global economic recovery following a run of upbeat economic data, particularly out of the U.S., and indications from Federal Reserve chairman Ben Bernanke that the central bank isn't going to change its super-easy monetary policy any time soon.

Many stock indexes are back where they were at the start of the week, when they were roiled by inconclusive Italian election results that reignited concerns over the country's ability to heal it public finances and Europe's debt crisis as a whole.

"Although February isn't going to stand out in traders' minds the same way that January did, it's certainly shaping up to be a robust end to the month," said Fawad Razaqzada, market strategist at GFT Markets. "Bernanke's two-day testimony has been well-timed and the continued commitment to stimulus measures — specifically to support housing, autos and other parts of the economy — has given the bulls a new lease of life."

In Europe, the FTSE 100 index of leading British shares rose 0.6 percent to close at 6,360.81 while Germany's DAX rose 0.9 percent to 7,741.70. The CAC-40 in France ended 0.9 percent higher at 3,723.

Italian shares slowly moved higher through the day despite ongoing concerns about the ability of political leaders to cobble together a government that will enact further economic reforms and tight budgetary controls. The FTSE MIB index in Milan ended 0.6 percent higher at 15,921.25.

However, most of the focus in the markets was on Wall Street, where the Dow Jones industrial average appears to have a realistic chance of closing at a record higher. The index was up 0.1 percent at 14,081.80. It hit its record closing high, 14,164.53, in October 2007.

The broader S&P 500 index is still a way from its record but it did close Wednesday at a five-year high. It was up a further 0.1 percent at 1,517.91.

The opening on Wall Street got a modest boost from the news that the U.S. economy, the world's largest, grew at an annualized rate of 0.1 percent in the final three months of 2012. The previous estimate from the Commerce Department had it contracting the equivalent rate.

Unlike the end of 2012, when investors were concerned about the upcoming fiscal cliff, investors appear sanguine over the risks associated with planned spending cuts that are due to take effect at the start of March as part of a previous budget agreement between the White House and Congress. The planned "sequester" could hit U.S. growth if no deal is reached to avoid it. Previous experience, however, suggests a last-minute deal will be cobbled together.

"Given the late deals we've seen in the past, this could be due to high expectations of a late deal, or alternatively, it may just be that compared to the fiscal cliff at the end of last year, the impact will be minor," said Craig Erlam, market analyst at Alpari.

The dollar has not been affected by the planned cuts and has rallied hard this week amid strong U.S. economic news and rising tensions over Italy. The euro was down 0.4 percent at $1.3078 while the dollar was up 0.2 percent at 92.36 yen.

Earlier in Asia, Tokyo's benchmark led gains after the government of Prime Minister Shinzo Abe nominated Haruhiko Kuroda, currently president of the Asian Development Bank, to head Japan's central bank. The Nikkei 225 stock average closed at 11,559.36, up 2.7 percent.

Kuroda is seen as a supporter of Abe's efforts to overcome Japan's 20 years of economic stagnation with bolder monetary easing, a weaker yen and bigger government spending.

Elsewhere, South Korea's Kospi ended 1.1 percent higher at 2,026.49, the highest close since Jan. 2, while Hong Kong's Hang Seng added 2 percent to 23,020.27.

Oil markets were steady, with benchmark crude for April delivery down 29 cents at $92.47 a barrel in electronic trading on the New York Mercantile Exchange.

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Youkyung Lee in Seoul, South Korea contributed to this report.

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