* 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 opening of U.S. markets, byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Feb 1 (Reuters) - Global stocks rallied and the
euro rose to its highest versus the dollar in more than two
months on strong manufacturing data worldwide and easing fears
that Egypt's unrest would spread in the Middle East.
But crude remained above $100 a barrel in London as traders
assessed the risk of unrest spreading to neighbors who are
members of the Organization of Petroleum Exporting Countries.
[]
Global stocks jumped as manufacturing activity in the euro
zone accelerated in January, while an index of the U.S.
manufacturing sector rose to its highest level since May 2004.
Major European stock indexes rose more than 1 percent, as
did the technology-rich Nasdaq composite in the United States.
The strong economic data lifted copper to a record high and
tin prices also peaked.
"Manufacturing is outperforming other parts of the economy,
but we're also seeing some inflationary seeds in costs rising,"
said Gary Thayer, chief macrostrategist at Wells Fargo Advisors
in St. Louis, referring to the U.S. economy.
Global stocks as measured by MSCI's all-country world index
<.MIWD00000PUS> jumped 1.2 percent, while the pan-European
FTSEurofirst 300 <> index of top shares rose 1.4
percent.
"We are having a strong day, obviously we have had some
decent PMI numbers out of the euro zone," said Peter Dixon, an
economist at Commerzbank.
On Wall Street, the Dow Jones industrial average <> was
up 87.91 points, or 0.74 percent, at 11,979.84. The Standard &
Poor's 500 Index <.SPX> was up 13.95 points, or 1.08 percent,
at 1,300.07. The Nasdaq Composite Index <> was up 31.84
points, or 1.18 percent, at 2,731.92
Easing concern over unrest in Egypt helped boost the single
European currency, initially push oil lower and take the wind
out of U.S. Treasury debt prices, which fell for a second
straight day as investors unwound flight-to-safety purchases.
The euro climbed above key resistance around $1.3756, and
traders said the single currency was poised to make a run to
$1.40, a level that likely will attract selling interest.
"When the whole world starts buying and talking about the
strength of the euro, it's probably a good time to start fading
it," said Firas Askari, head of FX trading at BMO Capital
Markets in Toronto. "I still think there are some core
fundamental issues in Europe that have not been addressed."
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.45 percent at 77.384.
Against the Japanese yen, the dollar <JPY=> was down 0.35
percent at 81.78.
Oil rose and remained above $100 a barrel in London, but
crude prices in New York fell.
The uprising against the Egyptian government is unlikely to
disrupt tanker movement and oil flows along the strategic Suez
canal and Sumed pipeline, but analysts and traders said that
the restive mood in the region would support prices.
"The dangers of possible insecurity pushed it to break
$101, but that has been pretty much discounted now, it's been
priced in. For another push, the market is looking for an
indication that demand is growing," said Simon Wardell, oil
analyst at Global Insight.
Brent crude futures <LCOc1> rose 28 cents to $101.29 a
barrel and U.S. crude oil futures <CLc1> fell 36 cents to
$91.83 a barrel.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 20/32 in price to yield 3.45 percent.
Lower-rated euro zone debt rallied after data showed
above-forecast growth in some of the region's weaker economies,
adding to pressure on Bunds, which fell sharply on worries over
persistent inflation. []
Euro zone manufacturing sector data was surprisingly
strong, showing growth primarily in Germany was lifting others
in the bloc. []
Spanish, Italian, Portuguese and Greek government debt
yields all fell relative to 10-year German debt, dropping
further from highs hit last month on concern over the ability
of some states to borrow at sustainable cost. []
Japan's Nikkei share index <> rose 0.4 percent and the
MSCI index of Asian shares outside of Japan <.MIAPJ0000PUS>
rose 0.3 percent.
(Reporting by Wanfeng Zhou, Chuck Mikolajczak and Chris Reese
in New York; Joanne Frearson, Jessica Bachman, William James,
Marie-Louise Gumuchian and Jan Harvey in London; Writing by
Herbert Lash)
