GLOBAL MARKETS-Stocks, dollar cheered by brighter economic data, US earnings

Reuters - UK Focus

* Beige Book helps lift dollar on heels of upbeat NY data

* European car sales, Japan orders add to optimism

* Equities supported near peaks, gold weakens

* Euro zone periphery bonds extend rally

By Toni Vorobyova

LONDON, Jan 16 (Reuters) - Global stocks steadied aroundsix-year peaks and the dollar rose on Thursday, held aloft byrobust data from Europe, the United States and Japan as well asupbeat corporate earnings.

European car sales posted their strongest gain in four yearsin December, while in Japan core machinery orders jumped inNovember, a sign companies may be ready to ramp up investmentand increase wages.

Sentiment has also been lifted in the past day by datashowing manufacturing in New York (Frankfurt: HX6.F - news) state hit a 20-month high thismonth, one of the first glimpses of U.S. economic activity this year.

That has helped the dollar regain some of its swagger afterbeing battered by the surprisingly weak U.S. non-farm payrollreport at the end of last week.

The Federal Reserve said in its Beige Book published late onWednesday that the world's biggest economy continued to grow ata moderate pace late last year, and some regions expected apick-up in growth.

Thursday's data is expected to feature a fall in weekly U.S.jobless claims.

The dollar rose 0.2 percent to 104.72 yen, adding toa 0.3 percent rise overnight and bouncing back from a four-weeklow of 102.85 set on Monday.

Economic optimism weighed on safe-haven gold prices - whichedged lower for a third day in a row - but benefitedequities. The MSCI all-country world index heldfirm at 407.17 points, just 1.38 points below a six-year high.

The MSCI world index, which strips out the recently weakemerging markets, rose as high as 1,661.33 points, a level notseen since November 2007.

"For the first time in a while, the global economic recoveryis driven by developed countries, and central banks remain veryaccommodative. All in all, the environment is favourable torisky assets," said Pascal Voisin, chief executive officer ofNatixis Asset Management, which has 292 billion euros ($398billion) under management.

The Standard & Poor's 500 climbed to an all-timeclosing high on Wednesday on the back of the economic data andstrong quarterly earnings from Bank of America (TLO: BAC.TI - news) .

The onus on Thursday's earnings reports - which includeAmerican Express (Xetra: AEC1.DE - news) , Blackrock (NYSE: BLK - news) , Citigroup (NYSE: C - news) , GoldmanSachs and Intel (Berlin: INL.BE - news) - is to back up the relativelyupbeat picture so far.


Only around 5 percent of S&P 500 companies have alreadyreported fourth quarter earnings, but on average they are beating consensus by 1.4 percent, according to StarMine data.That does, however, mark some discrepancy between sectors.

"The interesting thing to note is that the worst (U.S.)sector for revenue and earnings misses has been the retailsector, which has accounted for about half of the earningsdisappointments thus far," Jim Reid, strategist at DeutscheBank, said in a note.

In Europe, too, consumer stocks have proved the weak spot,with Dutch grocer Ahold (Amsterdam: AH.AS - news) and Swiss watch and jewellerymarker Richemont both missing quarterly salesexpectations. Their shares fell 3.5 and 1.9 percentrespectively, keeping the pan-European FTSEurofirst 300 indexbelow recent 5-1/2 year highs.

Overall, though, sentiment on the region remained upbeat.Peripheral euro zone bond prices extended their rally withexpectations of a pick-up in global growth likely to increasethe demand from overseas for higher-yielding euro zone bonds.

Underscoring such demand, Spain sold more debt than plannedat a triple bond auction on Thursday.

Global economic optimism, however, failed to lift oilprices, with Brent crude falling below $107 a barrel on expectations of more supply from the Middle East and NorthAfrica.

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