* Stocks rally globally on better-than-expected U.S. data
* Oil nears $74 a barrel as U.S. manufacturing data shines
* Government debt prices fall on signs of global growth
* China data also revives appetite for riskier assets
(Adds opening of U.S. markets, changes byline, dateline
previously LONDON)
By Herbert Lash
NEW YORK, Sept 1 (Reuters) - A manufacturing rebound in
China and stronger-than-expected U.S. factory data spurred a
jump in equity and commodity prices worldwide on Wednesday,
helping start the month on a bright note after a gloomy
August.
Government debt prices extended losses, with the price of
benchmark 10-year U.S. Treasury notes and German Bund futures
shedding more than a full point, after U.S. manufacturing rose
in August for a 13th straight month. Major stock indexes around
the world rallied more than 2 percent. For details see:
[] []
The U.S. dollar rebounded to rise against the Japanese yen,
and the Australian dollar rallied 2 percent against the
greenback after a raft of upbeat economic data around the world
lifted the appetite for risk. []
Investors had been expecting the reading on U.S.
manufacturing activity from the Institute for Supply Management
to show a decline in August from July, which would have fit
with recent data that has shown a decided slowdown in the U.S.
economic recovery.
The Institute for Supply Management, an industry group,
said its index of U.S. factory activity rose to 56.3 in August
from 55.5 in July, beating a survey of 79 economists by Reuters
for a reading of 53.0.
"With the Institute for Supply Management not only showing
a gain from July but completely confounding the consensus of
economists for a sharp drop, all of a sudden the economic world
is not coming to an end, and that is sharpening the appetite
for risk assets," said David Dietze, chief investment
strategist at Point View Financial Services in Summit, New
Jersey.
U.S. manufacturing has expanded every month since August
2009, although the pace of growth had slowed in recent months
amid signs that a broader U.S. recovery was faltering.
Equity markets already were higher after China's
manufacturing sector staged a moderate rebound in August and
data showed Australia's economy grew at the fastest pace in
three years in the second quarter.
The Dow Jones industrial average <> was up 234.09
points, or 2.34 percent, at 10,248.81. The Standard & Poor's
500 Index <.SPX> was up 27.56 points, or 2.63 percent, at
1,076.89. The Nasdaq Composite Index <> was up 57.72
points, or 2.73 percent, at 2,171.75.
Shares of aluminum producer Alcoa Inc <AA.N> gained 2.6
percent to $10.48, while Freeport McMoRan Copper & Gold Inc
<FCX.N> climbed 5.5 percent to $75.94, bolstered by higher
metals prices.
Copper hit its highest level in more than four months on
the manufacturing rebound in China, the world's biggest copper
consumer, while oil rose to almost $74 a barrel.
[]
Energy shares jumped with the rise in crude oil prices. The
NYSE Arca Oil index <.XOI> rose 3.46 percent.
U.S. light sweet crude oil <CLc1> rose $2.07 to $73.99 per
barrel.
ICE Brent <LCOc1> rose $1.93 to $73.85.
China's purchasing managers' index (PMI) rose to 51.7 in
August from 51.2 in the previous month, official data showed on
Wednesday. []
European PMIs were less positive, showing manufacturing in
the euro zone grew last month at its slowest pace since
February.
European shares advanced to a near two-week high, bolstered
by mining shares on merger and acquisition talk, including
BHP's hostile bid for Canadian group Potash Corp <POT.TO>.
Rio Tinto <RIO.L> rose 5.3 percent and BHP Billiton <BLT.L>
added 3.6 percent. []
Cable & Wireless Worldwide <CWP.L> rose 7.9 percent, with
traders citing market talk of bid interest from U.S. rival AT&T
<T.N>. The British company declined to comment.
The FTSEurofirst 300 <> index of leading European
shares was up 2.7 percent.
The MSCI All-Country World equity index <.MIWD00000PUS>
rose 2.57 percent, and the Thomson Reuters global stock index
<.TRXFLDGLPU> gained 2.44 percent.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 34/32 in price to yield 2.59 percent.
The dollar was off against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.95 percent at 82.411.
The euro <EUR=> was up 1.06 percent at $1.2819, and against
the yen, the dollar <JPY=> was up 0.43 percent at 84.52.
Spot gold prices <XAU=> rose $1.20, or 0.10 percent, to
$1,246.80 an ounce.
(Reporting by Chuck Mikolajczak, Wanfeng Zhou and John Parry
in New York; Dominic Lau, Christopher Johnson and Jan Harvey in
London; Writing by Herbert Lash; Editing by Leslie Adler)
