Global stocks gained on Thursday on an improving U.S. jobs picture and data that showed China's economy regaining some traction, while U.S. crude futures were lifted by the supportive economic news and a drop in crude inventories.
Payrolls processor ADP reported that private employers added jobs in October at the fastest pace in eight months, a sign of modest healing in the U.S. labor market. Other data showed a sharp improvement in consumer confidence.
A drop in new claims for jobless benefits last week also was encouraging and lifted sentiment ahead of nonfarm payrolls due out on Friday, though there were mixed signals regarding the health of U.S. manufacturing. There was renewed optimism about China, the world's growth engine, after official and private-sector factory surveys marked gains.
China's official Purchasing Managers Index for October showed gains in factory activity for the first time since July. "There is a general trend of things getting more positive, which should help stocks and the economy at large going forward," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. U.S. stocks advanced in a broad rally, though Wall Street pared some gains in afternoon trading.
In Europe, the FTSE Eurofirst index of top European shares closed up 1.2 percent at 1,109.99. The pick-up in Chinese activity increased the appetite for European automakers, with the one sector index up 1.74 percent and BMW up 3 percent. MSCI's all-country world equity index gained 0.7 percent to 331.34. The Dow Jones industrial average was up 108.48 points, or 0.83 percent, at 13,204.94. The Standard & Poor's 500 Index was up 11.67 points, or 0.83 percent, at 1,423.83.
The Nasdaq Composite Index was up 35.22 points, or 1.18 percent, at 3,012.45. U.S. Treasuries prices fell on news of the Chinese PMI manufacturing surveys, while China's central bank also conducted its largest-ever net fund injection this week. The central bank's move signaled its intention to keep money market conditions relatively loose and support lending to the real economy before a once-in-a-decade political transition, starting on Nov. 8 at the 18th Party Congress.
"The main reason Treasuries were down is that the Chinese central bank continues to inject record levels of liquidity into the market and the China PMI was better than expected," said Steven Van Order, fixed-income strategist at Calvert Investment Management in Bethesda, Maryland.
The benchmark 10-year U.S. Treasury note was down 7/32 in price to yield 1.7172 percent. The euro surrendered gains against the dollar after a Greek court ruled the country's pension reform demanded by foreign lenders may be unconstitutional, stoking worries about Athens' ability to implement austerity measures needed to secure aid. The euro was down 0.20 percent at $1.2931.
Brent crude oil futures fell to $108 a barrel as investors analyzed the aftermath of super storm Sandy. The destruction wrought by the storm affected millions of people across the eastern United States and could dampen fuel demand just as the world's largest economy was showing signs of recovery, analysts said.
"Many refineries are still out or with low runs so a build in crude oil inventories is expected next week and a draw on diesel, heating oil with gasoline moving sideways because no cars are moving," said Michael Poulsen, oil analyst at Global Risk Management in Copenhagen. Brent crude futures slipped 50 cents to $108.20 a barrel. But in New York, U.S. futures gained on larger-than-expected crude oil stock draws and the U.S. manufacturing data. U.S. crude future rose 80 cents to $87.04 a barrel.
Crude inventories fell 2.05 million barrels, compared with a forecast build of 1.5 million barrels. Distillate stockpiles slipped less than expected, down by 93,000 barrels. Gasoline inventories rose by 935,0000 barrels, against forecasts for a 200,000 barrel rise.