Wall St ends at record to lead global shares; oil slides
World equity markets added to recent gains as Wall Street hit a record high after strong factory data, while soft manufacturing numbers in China reinforced expectations that the country will undertake stimulus measures.
US crude prices were pressured by expectations for a build in domestic inventories, and Chinese and European data weighed on the price of Brent.
Spot gold hit a seven-week low and prices of other safe-havens like US Treasuries and the yen also fell. Factories across Europe eased back on the throttle in March while China's vast manufacturing industry contracted for a third straight month, fueling expectations policymakers may be forced to act in coming months.
In the United States, however, manufacturing growth accelerated for a second straight month in March as production recovered, relieving fears that the economy had hit a stumbling block.
The S&P 500 hit a record intraday high, at 1,885.84., shortly after the manufacturing data was released, and closed just off the session high. MSCI's world stocks gauge was up 0.6 percent.
The Dow Jones industrial average rose 74.95 points, or 0.46 percent, at 16,532.61. The S&P 500 added 13.18 points, or 0.70 percent, at 1,885.52. The Nasdaq Composite gained 69.05 points, or 1.64 percent, at 4,268.04. European were lifted by merger activity as well as robust French factory data.
The FTSEurofirst 300 index of top European shares closed up 0.56 percent at a three-week high. US-dollar-denominated Nikkei futures added 0.5 percent.
Emerging stocks are now almost flat for the year after having fallen as much as 8.8 percent, a low hit early in February.
Yields in longer-dated US Treasuries rose on the upbeat US manufacturing data, while intermediate-dated Treasuries yields held steady in the wake of Yellen's comments.
The benchmark 10-year US Treasury note was last down 9/32 in price to yield 2.7571 percent, compared to a yield of 2.724 percent late Monday.
The expectation of Fed support kept the US currency under pressure from the euro, but the dollar hit a session high against the yen after the US manufacturing data. Traders were also awaiting Friday's US payrolls data.
The euro's gains versus the greenback remained capped by talk the European Central Bank, which meets on Thursday, may have to cut interest rates again in coming months to keep deflation at bay.
The euro was up 0.2 percent at $1.3793. The yen, another traditional safe haven, slipped to a four-week low against the dollar. It was last down 0.4 percent at 103.57 per dollar.
Among commodities, Brent crude tumbled 2.4 percent to $105.15 a barrel weighed by the Chinese data and on the possibility of a jump in supplies from Libya after rebels blocking eastern oil ports hinted at a deal with Tripoli.
US crude was down 2.2 percent to $99.37 a barrel, pressured by expectations for a build in domestic inventories.
Spot gold, one of this year's surprise star performers after a 2013 slump, hit a seven-week low of $1,277.29 per ounce. It was recently down 0.3 percent at $1,279.85. The price is still up more than 6 percent year-to-date.