GLOBAL MARKETS-World shares flat but Wall St gains; S&P 500 at new high

Reuters

* Nikkei futures index down following earthquake

* U.S. bond prices rise before Fed meeting next week

* European shares dip from 5-year highs as rally fades

By Angela Moon

NEW YORK, Oct 25 (Reuters) - World equity indexes were near

five-year highs on Friday as major U.S. technology companies

propelled Wall Street to another day of gains, sending the S&P

500 index to close at a record.

Reversing early weakness, the euro slightly rose against the

dollar, hovering close to a two-year high, as souring German

business morale did little to dent bullish sentiment toward the

euro zone common currency.

While equity markets in Europe and Asia were weaker, Wall

Street extended its recent climb, helped by gains in technology

shares after strong results from Microsoft and

Amazon.com. Microsoft shares ended up 6 percent at

$35.73 while Amazon.com added 9.4 percent to $363.39.

The S&P 500 has gained about 23.4 percent so far this year,

just shy of its 23.5 percent jump in 2009. Surpassing that level

would give the index its biggest annual gain in a decade.

"It seems like good news is being responded to very well and

bad news is just seen as more evidence the Fed won't be able to

tighten anytime soon," said Rick Meckler, president of

LibertyView Capital Management in Jersey City, New Jersey.

The market has risen following last week's deal to avoid a

U.S. debt default and end a partial government shutdown, as well

as increased speculation the Federal Reserve will delay scaling

back its stimulus for several months. The S&P 500 had hit record

finishes for four sessions until Wednesday.

MSCI's world share index, which tracks 45

countries, was flat near a five-year high, erasing early

weakness.

Nikkei futures index fell 1.6 percent following news

that a large earthquake struck in the ocean east of Japan,

triggering a small tsunami. There were no immediate reports of

damage on land from the quake, classified as magnitude 7.1 by

the Japan Meteorological Agency, which struck about 370 km (230

miles) out to sea.

Japan's Nikkei stock average suffered its biggest one-day

loss in 2-1/2 months on Friday, hit by the yen's strength

against the dollar.

On Wall Street, the Dow Jones industrial average rose

61.07 points, or 0.39 percent, to 15,570.28, the S&P 500

gained 7.71 points or 0.44 percent, to 1,759.78 and the Nasdaq

Composite added 14.401 points or 0.37 percent, to

3,943.361. For the week, the Dow rose 1.1 percent, the S&P 500

was up 0.9 percent and the Nasdaq added 0.7 percent.

European equities ended slightly lower on Friday, with

Telecom Italia leading the telecoms sector down on concerns of a

capital hike by the Italian company and Volvo hurting

industrials after reporting a sharp drop in profits.

The pan-European FTSEurofirst 300 index closed 0.1

percent lower at 1,284.76, but for the week was up 0.6 percent

for a third straight week of gains after hitting a five-year

high on Tuesday.

In the currency market, the euro was up 0.1 percent

at $1.3808, not far from an earlier peak of $1.3832, its highest

since November 2011. Against the yen, the euro was up 0.2

percent at 134.48 yen.

The dollar was flat against a basket of six major currencies

at 79.178, off a near nine-month low of 78.998.

U.S. Treasury debt prices rose, with benchmark yields

hovering near three-month lows, as investors shifted their focus

to the Federal Reserve meeting next week, where it might signal

it will stick to the current size of its bond-purchase stimulus.

The bond market has traded in a tight range since Tuesday,

when yields fell on data that showed employers hired fewer

workers than expected in September, stoking fears the economy

was slowing even before the government's 16-day shutdown.

The 10-year note yield was on track to fall for

a second straight week, though it has struggled to decline much

below the chart resistance of 2.50 percent.

After a choppy week for commodities markets, Brent crude for

December settled down 6 cents at $106.93 a barrel while

U.S. crude oil ended up 74 cents at $97.85.

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