* Dollar gains vs yen on U.S. outlook, test of 100 yen level
seen
* Euro weakens after Draghi comments
* Global gains in stocks stall after recent records
* Oil briefly pares Syria-related gains, demand a concern
By Rodrigo Campos
NEW YORK, May 6 (Reuters) – The U.S. dollar rose against the
yen and euro on Monday and U.S. stocks hovered near last week’s
record highs as a brighter outlook for the U.S. economy
following last week’s jobs report continued to encourage the
hunt for high-yielding assets.
The euro fell against the greenback after European Central
Bank President Mario Draghi said the bank, which cut interest
rates last week, is watching economic data and is ready to act
again.
Purchasing managers indexes on Monday showed recession
dragged on euro zone companies and business growth flagged in
China, adding to a report on Friday that U.S. corporate growth
slowed in April.
Many analysts have expected a pullback in U.S. equities for
weeks now as the S&P; 500 index hit a historic high. Wall Street
has largely avoided a correction as traders have used weakness
as an opportunity to add to long positions.
“Everyone is settling in for the moment; we had a nice week
last week and there are no real catalysts to move us
significantly one way or the other today,” said Mark Martiak,
senior wealth strategist at Premier/First Allied Securities in
New York.
U.S. employment rose more than expected in April, with
165,000 jobs created, and hiring was much stronger than thought
in the previous two months, the U.S. government said on Friday.
The report eased concerns raised by other data that had pointed
to the U.S. economy losing steam.
In afternoon trading, the Dow Jones industrial average
rose 1.36 points or 0.01 percent, to 14,975.32, the S&P;
500 gained 3.47 points or 0.21 percent, to 1,617.89 and
the Nasdaq Composite added 13.78 points or 0.41 percent,
to 3,392.42.
The euro zone’s blue chip Euro STOXX 50 index
closed down 0.5 percent after hitting a near two-year peak on
Friday.
A 0.56 percent rise in MSCI’s broadest index of Asia-Pacific
shares outside Japan left the MSCI world equity
index little changed.
Brent crude oil futures hit their highest since
April 11 on supply concerns followed Israeli air strikes on
Syria on Friday and Sunday. But crude pared gains on demand
worries cemented on the weak data from China and the euro zone,
though it later bounced back.
“The attack over the weekend of Israel on Syria, on the one
hand, can lead to some increased geopolitical premium,” said
Olivier Jakob, oil analyst at Petromatrix in Switzerland.
“But the global PMIs are weak and that in itself is not
really bullish for distillates because the economy is still not
providing signs that a strong recovery is ahead. Global oil
demand is driven by distillates.”
Brent was last up 0.7 percent at $104.88 per barrel after
hitting $105.49 earlier. U.S. crude futures added 0.1
percent at $95.73.
DOLLAR STRENGTHENS
The U.S. dollar rose for a third straight session against
the yen and looked set to make another run at the 100-yen level
after last week’s surprisingly strong U.S. jobs data rekindled
optimism about the U.S. economy.
The dollar rose 0.4 percent to 99.40 yen, having hit
99.45 yen, its strongest since April 25, according to Reuters
data.
The euro also weakened against the greenback after
Draghi’s comments on possible further easing, but stayed within
last week’s range. The euro zone single currency was recently
down 0.3 percent at $1.3073.
U.S. Treasuries prices slipped slightly on Monday as
investors continued to digest Friday’s better-than-expected jobs
report, which sent yields surging to their highest in three
weeks.
U.S. government bonds are expected to stay at the relatively
higher yields as investors prepare for $72 billion in new supply
this week. Benchmark 10-year Treasuries yielded 1.77
percent, up from 1.74 percent on Friday and up from 1.62 percent
before the jobs data was released.
Billionaire investor Warren Buffett said in an interview
with CNBC that the U.S. economy is gradually improving, but low
interest rates have made bonds “terrible investments” while
stocks remain “reasonably priced.”
Gold prices were little changed after two weeks of gains, on
expectations last month’s price slide to the lowest in more than
two years has run its course for now.
Spot gold was recently down 0.1 percent at $1,468.40
per ounce.
