(Adds close of U.S. markets)
* Shares gain as tech shines on Microsoft-TikTok talks
* Nasdaq ends at record closing high
* Manufacturing rebound lifts oil, global equities
* Gold reaches new peak, eyes $2,000 level
* Dollar gains but still in downward draft
By Herbert Lash
NEW YORK, Aug 3 (Reuters) - The dollar rose and equity
markets rallied on Monday as investors welcomed upbeat
manufacturing data from around the world and as Microsoft's
pursuit of TikTok's U.S. operations and other deals bolstered
sentiment.
Gold prices retreated from a record high after some
profit-taking and the dollar's strengthening, though concerns
about the coronavirus' toll on the economy limited bullion's
losses.
Oil prices rose as manufacturing data from the United
States, Europe and China offset oversupply fears fueled by the
prospect of the Organization of the Petroleum Exporting
Countries and its allies winding back output cuts.
MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.79% to 556.26. Europe's broad FTSEurofirst 300 index
.FTEU3 closed up 2.1% at 1,413.87, lifted by a reading of IHS
Markit's final Manufacturing Purchasing Managers' Index (PMI)
for the euro zone.
The index bounced to 51.8 in July, its first time above the
50 mark separating growth from contraction since January 2019.
Manufacturing activity in China expanded at the fastest pace
in nearly a decade as domestic demand improved, China's
Caixin/Markit PMI showed, suggesting the world's second-largest
economy would help cushion the pandemic's blow to world growth.
In the United States, manufacturing activity accelerated to
its highest level in nearly 1-1/2 years in July as orders
increased despite a resurgence in new COVID-19 infections, the
Institute for Supply Management said. "There's good feelings in the stock market. You're seeing
that with earnings and you're seeing that with some of the PMI
numbers," said Rick Meckler, partner at Cherry Lane Investments
in New Vernon, New Jersey. "People were really expecting the
worse. Things are bad, but not as bad as predicted."
Wall Street's advance was driven by Microsoft MSFT.O ,
whose shares rose 5.6% after it formally declared interest in
TikTok's U.S. operations on Sunday, Meckler said.
ADT ADT.N surged 57% on news that Alphabet's GOOGL.O
Google was buying a nearly 7% stake in the home security firm
for $450 million in a deal that will allow it to provide service
to customers of its Nest home security devices. "Investors are going with what's worked for them and they've
decided technology has survived what they see as the worst of
the pandemic," Meckler said.
The Dow Jones Industrial Average .DJI rose 0.89%, the S&P
500 .SPX gained 0.72% and the Nasdaq Composite .IXIC
advanced 1.47% to set a record closing high.
Technology .SPLRCT led S&P's 11 sectors with a gain of
more than 2.6%. Apple's AAPL.O overtaking of Saudi Aramco
2222.SE on Friday to become the world's most valuable company
also helped fuel the tech rally. The tech giant is about $140
billion short of hitting $2 trillion in market capitalization.
The dollar rose against a basket of currencies as investors
unwound some recent short positions after the currency posted
its weakest monthly performance in a decade in July. Gains were
slowly pared as the day progressed.
Speculators' net shorts on the dollar are at their highest
since August 2011 at $24.27 billion, Reuters calculations and
U.S. Commodity Futures Trading Commission data show.
IMM/FX
The dollar index =USD rose 0.111%, with the euro EUR=
down 0.1% to $1.1762. The Japanese yen weakened 0.04% versus the
greenback at 105.94 per dollar.
Oil rose. Brent crude futures LCOc1 settled up 63 cents at
$44.15 an ounce. U.S. crude futures CLc1 rose 74 cents to
settle at $41.01 a barrel.
Gold closed little changed, but was poised to break through
the $2,000-an-ounce mark.
U.S. gold futures GCv1 settled mostly unchanged at
$1,986.30 an ounce.
Further dollar gains were likely to be capped by the slowing
U.S. recovery and real rates breaking below -1% for the first
time.
The real rate hit a record low amid a marked flattening of
the yield curve as investors wager on more accommodation from
the Federal Reserve.
Benchmark 10-year Treasury yields US10YT=TWEB rose 1.7
basis points to 0.527% after touching the lowest level since
March last week.
German government bond yields fell slightly to -0.525%.
China's manufacturing data helped blue chips .CSI300 rally
1.6%, offsetting worries about U.S.-China relations.
Japan's Nikkei .N225 added 2.2%, courtesy of a pullback in
the yen.
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Apple beats Saudi Aramco https://tmsnrt.rs/3k6aTP6
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