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World stocks rise on signs of steady US recovery

Pamela Sampson, AP Business Writer

A man under an umbrella walks past an electronic stock board of a securities firm in Tokyo Monday, May 20, 2013. Japan's Nikkei 225 index jumped 1.4 percent to 15,352.84 as evidence of a steady economic recovery in the U.S. helped push Asian stock markets higher Monday. (AP Photo/Koji Sasahara)

BANGKOK (AP) -- Evidence of a steady economic recovery in the U.S. helped push world stock markets higher Monday.

A gauge of future economic activity issued Friday rose more than expected, a sign that the world's biggest economy is improving. Consumer confidence also rose, offsetting several lackluster reports on slowing manufacturing and an increase in applications for unemployment benefits.

Britain's FTSE 100 rose 0.7 percent to 6,735.31. Germany's DAX gained 0.5 percent to 8,440.38. France's CAC-40 advanced 0.3 percent to 4,012.55. Wall Street looked set for a flat opening, however. Dow Jones industrial futures were nearly unchanged at 15,316. S&P 500 futures were flat at 1,663.10.

Asian stock markets were broadly higher. Japan's Nikkei 225 index jumped 1.5 percent to 15,360.81. Hong Kong's Hang Seng surged 1.8 percent to 23,493.03. Australia's S&P/ASX 200 advanced 0.5 percent to 5,209. Benchmarks in mainland China, Taiwan, and Indonesia also rose. South Korea's Kospi fell 0.2 percent to 1,982.43.

Investors will have a slew of data to sift through this week, including U.S. homes sales and durable goods orders. Analysts are somewhat pessimistic about the strength of China's recovery but are expecting to see solid improvement in the U.S.

In Washington, remarks by Federal Reserve Chairman Ben Bernanke to members of Congress on Wednesday will be closely examined for hints about the future direction of the central bank's monetary policy.

The Fed is currently conducting the third round of massive bond purchases known as quantitative easing to help drive down interest rates and spur lending. But recently improving data on the U.S. economy has led to speculation that the Fed might consider winding the program down earlier than expected.

"What everyone is watching for is any comment from the Fed chief on asset purchases or any clarification on current thinking," said Mitul Kotecha of Credit Agricole CIB in Hong Kong. "The timing of any decision on winding down asset purchases is still very much undecided so it seems unlikely Bernanke will be categorical or provide strong timing about a reduction" in quantitative easing.

HSBC's survey on China's manufacturing growth, to be released Thursday, is also highly anticipated. Analysts at Credit Agricole are expecting a slight deceleration due to seasonal factors, from 50.4 in April to 50.3 in May.

"More signs of weakness will add to global growth worries. I think markets are particularly sensitive to this data release," Kotecha said.

Wall Street stocks again pushed higher Friday after the Conference Board said its index of leading economic indicators rose 0.6 percent last month after a revised decline of 0.2 percent in March. The index is intended to predict how the economy will be doing in three to six months. Separately, the University of Michigan's preliminary survey of consumer confidence climbed to 83.7. Economists had predicted that the gauge would climb to 76.8.

Benchmark oil for June delivery was down 57 cents at $95.45 a barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro rose to $1.2846 from $1.2829 late Friday in New York. The dollar fell to 102.54 yen from 103.18 yen.


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