Global shares edge higher on US data; dollar falls

Global equity markets rose slightly on Thursday, boosted by data indicating strength in the US economy and by upbeat results from some major American companies, while the dollar trended lower following dovish Federal Reserve comments.

The number of Americans filing initials claims for jobless benefits rose less than expected in the latest week and factory activity in the US mid-Atlantic region expanded in April at a faster clip than expected.

Quarterly results from Morgan Stanley, Goldman Sachs and General Electric improved risk sentiment, though results from tech heavyweights Google and IBM Corp were disappointing.

"When we look at the US results coming out today, there was a predominantly positive beat overall," said Gerhard Schwarz, head of equity strategy at Baader Bank.

Morgan Stanley reported a 55 per cent jump in first-quarter earnings, General Electric posted a 12 per cent rise in overall industrial profits, and both earnings and revenue of Goldman Sachs beat market estimates.

World stocks, as measured by the MSCI all-country index, rose 0.28 per cent.

Thursday's US economic data also supported riskier assets.

"The trend in the jobless claims is a positive for the economy, and certainly keeps the recovery on track for the US," said Greg Michalowski, chief currency analyst at FXDD.

"However, the Good Friday/Easter weekend should keep activity subdued in the markets today."

The US Labor Department said initial claims for unemployment benefits ticked up 2,000 to a seasonally adjusted 304,000 for the week ended April 12, near the 6-1/2-year low touched the prior week.

The Philadelphia Federal Reserve Bank said its business activity index rose to 16.6 from 9.0 in March. A reading above zero indicates expansion in the mid-Atlantic region's manufacturing.

European stocks rose on the positive US economic data. The FTSEurofirst 300 index of top European shares closed up 0.44 per cent.

US safe-haven Treasuries prices dipped, meanwhile, on the positive initial jobless claims data. Benchmark 10-year US Treasury notes were last down 10/32 in price to yield 2.675 per cent.

The dollar slipped in the wake of comments by Federal Reserve Chair Janet Yellen on Wednesday that low interest rates are needed to support the US economy, even though such a policy stands to hurt its currency.

Achieving the Fed's economic goals "will likely require low real interest rates for some time", she said, saying the policy view was shared broadly across many advanced economies. The comments continued to hurt the dollar, despite the strong US economic data.

"The data are not strong enough to push back the dovish stand," said Sebastien Galy, currency strategist at Societe Generale in New York.

The Dow Jones industrial average fell 6.46 points, or 0.04 per cent, to 16,418.39.

The S&P 500 gained 1.27 points, or 0.07 per cent, to 1,863.58.

The Nasdaq Composite added 9.242 points, or 0.23 per cent, to 4,095.467.

Of the 83 companies in the S&P 500 that have released first-quarter results so far, 62.7 per cent reported earnings that beat analysts' expectations, less than 1 per cent better than the 20-year average in a typical quarter, Thomson Reuters' data show.

US government bond prices fell with the 10-year note down 11/32 in price to yield 2.677 per cent.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.076 points or 0.1 per cent, to 79.727.

The situation in Ukraine remained tense, with the interior minister saying on Thursday that three pro-Russian separatists had been killed in shooting overnight in the town of Mariupol on the Sea of Azov.

Ukrainian, Russian and Western diplomats arrived for emergency talks in Switzerland, but there was little hope of them making progress in resolving a crisis that has seen armed pro-Russian fighters seize whole swathes of eastern Ukraine.

Spot gold was down 0.2 per cent to $1,299.60 an ounce.

Copyright @ Thomson Reuters 2014