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By Sinéad Carew and Tom Wilson
NEW YORK/LONDON (Reuters) -MSCI's global equity index rose on Wednesday, hitting its highest level in almost two years, backed by positive earnings and economic data in both Europe and the United States as well as optimism China stimulus will support its stock markets.
Treasury yields rebounded on Wednesday as investors demanded a higher risk premium after data showed U.S. business activity picking up in January and inflation appearing to abate before key data in coming days and a Federal Reserve meeting next week.
On Wall Street the benchmark S&P 500 inched up to a closing record for the fourth day in a row after hitting a new intraday high. It was helped by a surge in Netflix shares after the video streaming service smashed subscriber growth estimates and a rally in chip stocks after strong earnings from Dutch chipmaking equipment manufacturer ASML Holding.
In U.S. economic releases, S&P Global said its flash U.S. Composite PMI Output Index, tracking manufacturing and services sectors, rose to its highest level since June, driven by gains in both services and manufacturing.
"Three things really stand out as far as driving stocks today. They're charging higher after some good earnings, a decent set of purchasing manager indexes, and China's continued stimulus efforts," said Brian Jacobsen, chief economist at Annex Wealth Management.
The MSCI world equity index, which tracks shares in 47 countries, was up 0.42%, after earlier hitting its highest intraday level since February 2022.
The Dow Jones Industrial Average fell 99.06 points, or 0.26%, to 37,806.39, the S&P 500 gained 3.95 points, or 0.08%, to 4,868.55 while the Nasdaq Composite gained 55.98 points, or 0.36%, to 15,481.92.
Nasdaq, which closed near its session lows, was boosted by a 1.5% gain in the Philadelphia Semiconductor index as ASML's report drew investors to the sector broadly.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, said that after coming under pressure recently, "Nasdaq is playing a bit more catch-up today on the back of the semiconductor space."
ASML had also helped cheer European investors, with the Europe 600 index closing up 1.18%, for its biggest one-day percentage gain since mid-November.
Europe's data was mixed, with the manufacturing purchasing managers' index (PMI) showing a tough start to 2024 as euro zone business activity contracted while the outlook improved. Germany and France, the zone's biggest economies, saw improvements in manufacturing PMIs even as services deteriorated.