* 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
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.