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GLOBAL MARKETS-Manufacturing data lifts stocks; U.S. dollar remains weak

Tue, 1st Sep 2020 16:13

* Stocks climb on manufacturing data

* Dollar hits lowest level since April 2018

* For Reuters Live Markets blog on European and UK stock
markets,
please click on:
(Updates to open of U.S. markets, changes dateline; previous
LONDON)

By Chuck Mikolajczak

NEW YORK, Sept 1 (Reuters) - A gauge of global stocks kicked
off September on a higher note on Tuesday, as data in major
economies showed manufacturing demand rebounding from
coronavirus-induced lows, while the U.S. dollar remained weak.

In the United States, stocks added to gains after two
measures of manufacturing activity indicated expansion, with the
reading from the Institute for Supply Management (ISM) hitting a
19-month high.

Factory activity in China expanded at the fastest rate in
nearly a decade in August, a private PMI survey showed on
Tuesday, boosting market sentiment overnight and at the European
market open.

Euro zone manufacturing activity also grew last month to
stay on a path towards recovery, though factory managers
remained wary about investing and hiring more workers.

"These are great headlines and certainly bolstering
confidence in a U.S. and European rebound," said Jack Ablin,
chief investment officer at Cresset Capital Management in
Chicago.

"I would call this great rebound news, but as long as we are
relying on government support, both here and abroad, we have a
long way to go."

The Dow Jones Industrial Average rose 50.45 points,
or 0.18%, to 28,480.5, the S&P 500 gained 10.25 points,
or 0.29%, to 3,510.56 and the Nasdaq Composite added
105.92 points, or 0.9%, to 11,881.38.

The gains pushed the S&P 500 and Nasdaq to intraday records.

The rebound in manufacturing can be partly attributed to
massive monetary and fiscal stimulus programs implemented across
the globe to support economies battered by the coronavirus.

But not all data was rosy and European stocks reversed
course and turned lower after Germany cut its GDP forecast for
2021 and a reading on inflation for the bloc turned negative for
the first time in more than four years.

The pan-European STOXX 600 index lost 0.34% and
MSCI's gauge of stocks across the globe gained
0.32%.

The dollar remained weak against a basket of major
currencies despite the optimistic data, falling to its lowest
level since late April 2018 at 91.737. The greenback has dropped
about 1% since Federal Reserve Chair Jerome Powell on Thursday
said the U.S. central bank was shifting to average inflation
targeting.

The dollar index fell 0.154%, with the euro up
0.18% to $1.1957.

The euro climbed above $1.20 for the first time since May
2018.

Benchmark 10-year notes last fell 4/32 in price
to yield 0.7064%, from 0.693% late on Monday.

The weaker dollar helped lift oil prices, reversing
overnight losses.

U.S. crude rose 1.57% to $43.28 per barrel and Brent
was at $46.08, up 1.77% on the day.

(Reporting by Chuck Mikolajczak
Editing by Paul Simao)

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