* China's factories expand at best pace in 7 months
* Wall St opens higher, S&P 500 up after snappingfour-session winning streak
* Expectations of unchanged Fed policy weigh on dollar, liftgold
By Angela Moon
NEW YORK, Oct 24 (Reuters) - Global equity markets edgedhigher on Thursday, boosted by signs of growth in China'smanufacturing sector, while rising expectations that the FederalReserve will keep its stimulus efforts in place for months keptU.S. Treasuries yields near three-month lows.
Wall Street opened higher a day after the S&P 500 indexbroke a four-session winning streak as investors grappled with ahost of corporate earnings and muddled economic data.
The low Treasuries yields kept the dollar pressured whilehelping the euro as the Fed's easy monetary policy outweighedweaker euro zone data. The euro was up 0.3 percent at$1.3816, having earlier hit $1.3824, its strongest level sinceNovember 2011, while the dollar fell broadly, hitting a nearnine-month low of 79.081 against a basket of currencies.
Fed policy is seen as very data dependant, though economicindicators over the coming month are likely to be skewed by theeffects of the government shutdown. That could limit insight on the actual state of the economy and to what degree the shutdownand the fight over raising the debt ceiling harmed growth.
"What we've been seeing since the government shutdown anddebt ceiling was resolved is a desire to jump back intoTreasuries," said Jason Rogan, managing director in Treasuriestrading at Guggenheim Partners in New York.
"Most market participants are of the mind that the Fed is onhold for the foreseeable future."
Treasuries have rallied since data on Tuesday showedemployers added fewer jobs than expected in September, strokingfears the economy was slowing, even before the government's16-day shutdown.
However, on Thursday the benchmark 10-year U.S. Treasurynote was down 6/32, its yield at 2.5052 percent.
Data showed activity in China's vast factory sector reacheda seven-month high this month, easing concerns about a slowdownin Chinese exports, which would point to weakening globaldemand.
On Wall Street, the Dow Jones industrial average wasup 87.50 points, or 0.57 percent, at 15,500.83. The Standard &Poor's 500 Index was up 4.83 points, or 0.28 percent, at1,751.21. The Nasdaq Composite Index was up 20.37points, or 0.52 percent, at 3,927.44.
European shares recovered their poise, climbing back towardfive-year highs thanks to strong corporate results and theencouraging manufacturing data from top metals consumer China.
The pan-European FTSEurofirst 300 index was up 0.4percent at 1,284.89, recovering from the previous session's falland climbing back toward Tuesday's five-year highs of 1,291.93.
MSCI's world equity index added 0.2 percent,slightly retracing losses of 0.6 percent on Wednesday, whenmarkets were rocked by fears that a spike in Chinese short-termrates could hurt growth.
The U.S. manufacturing Purchasing Managers Index rose at itsslowest pace in a year this month and factory output contractedfor the first time since late 2009. The survey was conductedpartly during the 16-day U.S. government shutdown, whicheconomists expect will slow overall U.S. growth slightly in thelast three months of 2013.
Markit's PMI index for the 17-nation euro area showedbusiness activity eased slightly in October after a pick-up inSeptember, though it confirmed that the region's economicrecovery was taking root.
U.S. corporate earnings continue to pour in, with 47 S&P 500 components expected to report on Thursday, includingMicrosoft Corp and Amazon.com Inc after theclose of trading.
"The earnings picture was not supposed to be that great thisquarter and in fact we are seeing that. The thing that isdisappointing is top-line revenue, and those are not goodsigns," said Keith Bliss, senior vice-president at Cuttone & Coin New York.
"So what is going to drive the market from that point isgoing to be Washington policy and Fed policy."
In commodities trading, gold was the biggest mover,up 0.4 percent to $1,336.50 an ounce, nearing a four-week highas the outlook for an unchanged Fed policy heightened concernsabout inflation risk.
"Postponement of tapering means higher liquidity in themarket, probably higher inflation risks in the longer term,"Commerzbank analyst Eugen Weinberg said. "That's likely to leadto higher interest in gold."
Brent crude futures slipped 0.5 percent to near $107 abarrel as rising supplies of crude oil in the United Statesdrove prices toward a two-month low, while U.S. crude fell for afourth straight session to its lowest since June. But theselling was not as heavy as in the previous session.
Brent crude oil was down 49 cents to $107.31 abarrel while the U.S. crude oil benchmark, also known asWest Texas Intermediate or WTI, shed 47 cents to $96.49 abarrel.
Copper edged down to its lowest in more than a week as concerns about the current tight credit conditions in Chinaand its impact on demand offset the brighter growth outlook.
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