Global Shares Rise On U.S. Housing Data; Ukraine Vote Looms

Big 5

Global equity markets edged higher on Friday after better-than-expected U.S. housing data lifted Wall Street into record territory, while yields on U.S. Treasuries fell on uncertainty about elections in Ukraine over the weekend.

The benchmark S&P 500 set a new closing high, closing above the 1,900 mark for the first time. MSCI’s measure of global equity performance rose to highs last seen in November 2007, just short of all-time highs that month.

The day’s gains held, contrary to beliefs there might be selling pressure before the close as U.S. investors headed into a three-day weekend with the Memorial Day holiday on Monday and uncertainty over Ukraine’s elections on Sunday.

“There are still some concerns out there but they’re not manifesting themselves in the VIX,” said Philip Orlando, chief equity market strategist at Federated Investors in New York. “There’s a lot of complacency in the market at a point where the market has had a nice little bounce back into the 1,900 area.”

The CBOE Volatility Index .VIX, closed down 5.6 percent at 11.36, its lowest level since March 2013.

Sales of new U.S. single-family homes rose more than expected in April and the number of houses on the market hit a 3-1/2 year-high, further signs the housing recovery is poised to regain steam, the Commerce Department said.

MSCI’s all-country world index .MIWD00000PUS rose 0.3 percent to 418.33, about 2.4 percent from all-time peaks set in November 2007.

In Europe, the FTSEuroFirst 300 index of leading regional shares .FTEU3 closed up 0.21 percent to 1,369.17.

The Dow Jones industrial average .DJI closed up 63.19 points, or 0.38 percent, at 16,606.27. The S&P 500 .SPX rose 8.04 points, or 0.42 percent, to 1,900.53 and the Nasdaq Composite .IXIC added 31.466 points, or 0.76 percent, to 4,185.808.

For the week, the Dow rose 0.7 percent, the S&P 1.2 percent and the Nasdaq gained 2.3 percent.

Traders sought safe-haven bonds on the belief that elections in Greece and Ukraine could result in market volatility, including renewed worries of a Greek exit from the euro and the potential for greater tensions surrounding Ukraine.

“European parliamentary elections and Ukraine elections are key events in the near term which could be driving people into the safety of U.S. Treasuries,” said Robbert Van Batenburg, director of market strategy at Newedge USA LLC in New York.

If Greece’s leftist Syriza party wins, its leaders could reject the government’s austerity policies and threaten to leave the euro zone, he said. If pro-separatist voters in eastern Ukraine fail to participate, it could stoke further tensions between Russia and Ukraine.

U.S. government bond prices rose, with the 10-year note up 5/32, yielding 2.5356 percent.

The euro touched a three-month low of $1.3614 and a 17-month trough against the pound after soft German business sentiment stoked expectations the European Central Bank will lower interest rates next month.

Concerns that Sunday’s European Union election results could destabilize some euro zone governments also weighed on the euro.

The euro was last at $1.3627, down 0.2 percent. The dollar gained 0.24 percent against the yen at 101.96.

Brent crude held above $110 a barrel as U.S. crude futures pushed higher, supported by the crises in Ukraine and Libya as well as positive economic data in the world’s top two oil consumers, the United States and China.

Brent settled up 18 cents at $110.54 a barrel. U.S. crude gained 61 cents to $104.35.

Both Brent and U.S. crude futures posted consecutive weekly gains.

Source : Reuters