US economy hopes support global markets

LONDON (AP) ? Stock markets rose Tuesday on hopes that improvements in the U.S. economy will make up for the continued gloom in the eurozone, where the unemployment rate hit a new record high.

Factory orders in the U.S. rose 3 percent in February, according to official reports. That was the largest increase since September and more than analysts had been expecting. The figure boosted sentiment ahead of Friday's release of the monthly jobs figures, a key measure of the health of the world's largest economy.

By close of trading in Europe, Britain's FTSE 100 was up 1.2 percent to 6,491 while Germany's DAX rose 1.9 percent to 7,943. France's CAC-40 advanced the same, 1.9 percent, to 3,805.

Wall Street traded higher during the morning, with the Dow Jones index rising 0.6 percent to 14,670 and the broader S&P 500 up 0.7 percent to 1,572.

The steady recovery in the U.S. has been supporting markets in recent weeks in the face of financial trouble in the 17-country eurozone, where the economy continues to wilt under the pressure of government budget cuts.

Unemployment in the single currency bloc hit a record high in January and February, at 12 percent, according to the latest official figures released Tuesday. Governments are trimming costs and companies are discouraged from hiring due to uncertainty in markets.

Cyprus was the focus of such financial uncertainty this month as it chaotically negotiated a bailout. Deep cuts to its banking sector are expected to cause a huge slump in the economy ? to ease the pain the country was granted more time to reach its budget targets.

Earlier, Japan's Nikkei 225 tumbled 1.1 percent to close at 12,003.43 as the yen's recent weakness reversed course. A stronger currency makes products sold abroad more expensive, a hardship for Japan's export-dependent economy.

Analysts said, however, that the new government in Japan, with its new plan of attack to right the country's economy, has lifted business optimism. A survey released by the Bank of Japan on Monday showed an improvement in business sentiment, although it was smaller than expected.

"The economy is improving, albeit slowly, and the mood has been lifted by the assertive and coordinated economic plan of the new government," Moody's Analytics said in a market commentary.

Hong Kong's Hang Seng closed 0.3 percent higher at 22,367.82.

Australia's S&P/ASX 200 advanced 0.4 percent to 4,985.50. South Korea's Kospi opened higher but then gave up its gains by midday. It was 0.5 percent down at 1,986.15. Benchmarks in mainland China, the Philippines and New Zealand also fell.

In commodity markets, the benchmark oil contract for May delivery was down 67 cents to $96.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents on Monday.

In currencies, the euro rose to $1.283 from $1.2804 late Monday in New York. The dollar was up against the yen, at 93.45 yen from 94.22 yen .

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Pamela Sampson in Bangkok contributed to this report.

Source: http://news.yahoo.com/us-economy-hopes-support-global-markets-143052493--finance.html

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