* Global stocks rally on strong factory data worldwide
* Oil still above $100 in London, but U.S. crude slips
* Euro gains versus dollar on view inflation to push rates
* U.S. bond prices dip as investors unwind safe-haven bids
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Feb 1 (Reuters) - Global stocks jumped on Tuesday
in a broad rally spurred by hopes of further economic recovery
after strong factory data worldwide, while safe-haven assets
such as bonds fell as worries about unrest in Egypt ebbed.
U.S. benchmarks the Dow and S&P 500 closed at their highest
levels since June 2008 and looked poised for further gains as
corporate earnings continue to surprise on the upside. For
details see: []
The strong corporate picture and signs of an improving
economy eased investors' fears about possible economic fallout
from the political turmoil in Egypt, where President Hosni
Mubarak announced he will not seek re-election in September
after more than 1 million people gathered peacefully across the
country to demand that he step down. []
Investors capitalized on last week's pullback, sending the
Dow to close over the psychologically important level of 12,000
for the first time since June 2008 and the S&P 500 to close
above 1,300 for the first time since August 2008.
"While skeptics might attribute the recent ascent in stock
prices to animal spirits, we believe that fundamentals are the
real story behind the market's success," said Jonathan Golub,
strategist at UBS in New York.
Shares of Pfizer Inc <PFE.N> gained 5.5 percent on
better-than-expected earnings and revenue, while United Parcel
Service Inc <UPS.N> rose 4.1 percent after profit beat
estimates and it forecast record-high earnings in 2011.
The Dow Jones industrial average <> closed up 148.23
points, or 1.25 percent, at 12,040.16. The Standard & Poor's
500 Index <.SPX> rose 21.47 points, or 1.67 percent, at
1,307.59. The Nasdaq Composite Index <> added 51.11
points, or 1.89 percent, at 2,751.19.
Global stocks as measured by MSCI's all-country world index
<.MIWD00000PUS> jumped 1.6 percent.
Stocks in Tokyo were poised to open slightly lower, with
the March futures contract that trades in Chicago for the
Nikkei 225 <0#NK:> down 5 points at 10,330.
The euro hit a 2-1/2-month high above $1.38, boosted by an
acceleration of factory activity in the euro zone, even as
analysts said risk appetite could fade if worries resurface
over Europe's ability to manage its debt crisis.
[]
The euro rose as high as $1.3844 <EUR=>, its highest since
early November, with gains accelerating after it broke above
resistance at $1.3786.
The dollar, which benefited from a safe-haven bid late last
week when protests in Egypt intensified, fell broadly as risk
appetite returned, hitting a four-week low against the yen at
81.33 yen <JPY=>
The CBOE Volatility index <.VIX>, often called Wall
Street's fear index, fell for a second day, down almost 10
percent. The cost of five-year credit-default swaps on U.S.
debt also dipped in a sign of increased confidence.
Oil prices in London rose, pushing above $102 a barrel as
disruptions at Egyptian ports and Jordan's government shake-up
kindled concerns about unrest in the region. But U.S. crude
prices fell in choppy trade ahead of weekly reports expected to
show domestic crude inventories rose last week.
In London, ICE Brent crude for March <LCOc1> rose 73 cents
to settle at $101.74 a barrel.
U.S. crude oil for March delivery <CLc1> fell $1.42 to
settle at $90.77 a barrel.
U.S. Treasury debt prices fell for a second day as
investors unwound flight-to-safety purchases that were spurred
by fears of contagion from the Egyptian unrest. For details
see: []
"While the political unrest in Egypt continues, there does
not appear to be any significant impact on U.S. economic
conditions currently, thus the market's attention turned to the
economic data," said Sharon Stark, chief fixed income
strategist at Sterne Agee in Birmingham, Alabama.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 16/32 in price to yield 3.44 percent.
U.S. gold futures ended up as a weaker dollar stirred
buying interest, but it failed to rally further after the U.S.
manufacturing data and relative peace in Egypt dampened the
precious metal's safe-haven appeal. []
Gold futures for deliver in April <GCJ1> settled up $5.8 at
$1,340.30 an ounce.
Earlier in Asia, Japan's Nikkei share index <> rose
0.4 percent and the MSCI index of Asian shares outside of Japan
<.MIAPJ0000PUS> rose 0.4 percent.
(Reporting by Ed Krudy, Robert Gibbons, Stephen C. Johnson and
Richard Leong in New York; Writing by Herbert Lash; Editing by
Leslie Adler)
