* 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 European markets)
By Herbert Lash
NEW YORK, Feb 1 (Reuters) - Global stocks jumped more than
1 percent and safe-haven assets such as bonds fell on Tuesday
as news of strong manufacturing data worldwide lifted risk
appetites and worries about unrest in Egypt eased.
The euro rallied to a 2-1/2-month high versus the U.S.
dollar while the price of copper, an industrial metal, hit a
record high near $10,000 a tonne as the economic data suggested
the global recovery continued to gather steam.
The euro <EUR=> was up 0.96 percent at $1.3817.
U.S. oil prices < CLc1>, which had rallied in recent days
on fears that Mideast oil production could be disrupted because
of the unrest in Egypt, fell about 0.5 percent.
The CBOE Volatility index <.VIX>, a gauge of investor
apprehension on Wall Street, fell for a second day, down about
10 percent. The cost of five-year credit-default swaps on U.S.
debt also dipped in a sign of increased confidence.
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.
European shares posted their biggest gain in three weeks,
buoyed by strong manufacturing data from both the euro zone and
the United States. Oil shares got a boost from rising crude
prices in London. []
The pan-European FTSEurofirst 300 <> index rose 1.4
percent to end at 1,159.80 points.
Global stocks as measured by MSCI's all-country world index
<.MIWD00000PUS> jumped 1.6 percent.
Pfizer Inc's <PFE.N> announcement of a $5 billion share
buyback and better-than-expected earnings at Chinese Internet
company Baidu <BIDU.O> helped lift U.S. stock markets.
The Dow Jones industrial average <> was up 122.16
points, or 1.03 percent, at 12,014.09. The Standard & Poor's
500 Index <.SPX> was up 19.29 points, or 1.50 percent, at
1,305.41. The Nasdaq Composite Index <> was up 50.49
points, or 1.87 percent, at 2,750.57.
Worries that unrest in Egypt could spread to nearby major
oil-producing countries have helped drive up crude prices, but
some analysts have played down this risk.
"There is limited contagion risk from Egypt," said Bob
Parker, senior adviser at Credit Suisse. "And there's been
strong economic data -- note the ISM number data out of the
United States."
The ISM manufacturing index climbed to 60.8 in January, its
fastest pace in nearly seven years, while manufacturing
activity in the euro zone accelerated last month.
[][]
Crude prices in London rose as the Mideast is closer to
Europe, while the United States is much less reliant on oil
from the region.
Brent crude futures in London were up 6 cents at $101.09 a
barrel, but U.S. crude oil futures were down 60 cents at $91.59
a barrel.
Shipping sources said there were major disruptions in
Egypt's Alexandria and Damietta ports, pushing Brent swiftly
past $101.
"While we don't expect (oil) transit to be impacted, the
news of the port disruptions brings up the what-if?" said
Amrita Sen, oil analyst at Barclays.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.85 percent at 77.073.
Against the Japanese yen, the dollar <JPY=> was down 0.87
percent at 81.36.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 16/32 in price to yield 3.44 percent.
Lower-rated euro zone government debt rallied on talk of
extending the scope of the region's bailout fund for highly
indebted states. Above-forecast economic growth in the euro
zone added momentum to bond prices.
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. []
The Bund future <FGBLc1> fell 73 ticks to its lowest level
since early April, pressured by inflation concerns and
investors unwinding positions in safe-haven Bunds.
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 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; Editing by Leslie Adler)
