By Rodrigo Campos
NEW YORK (Reuters) - A global gauge of equities edged up to a more than six-year high on Monday after strong Chinese and U.S. factory data, while soft numbers out of Europe heightened expectations for action from the European Central Bank, pressuring the euro.
After early losses, U.S. stocks finished broadly higher, with both the S&P 500 and Dow industrials closing at record highs, after the Institute for Supply Management revised its manufacturing index for May to show faster acceleration than in the previous month. ISM had initially reported a slowdown in the pace of factory growth.
"The market has lately been focussed more on the weak economic news and the bond market, but we saw a reversal of that today with the revised (ISM) numbers. We got a better number and the bonds are selling off," said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey.
"But it's hard to move the (stock) market higher considering we are fairly fully valued at this point."
Yields on U.S. Treasuries posted the largest daily advance in more than six weeks, propelled by the revised ISM data. The yield on the benchmark 10-year Treasury was recently at 2.528 percent, still within last week's range.
At the closing bell on Wall Street, the Dow Jones industrial average rose 26.46 points, or 0.16 percent, to 16,743.63; the S&P 500 gained 1.4 points, or 0.07 percent, to 1,924.97; and the Nasdaq Composite dropped 5.42 points, or 0.13 percent, to 4,237.20.
Slight gains in European shares and a 2.1 percent jump in Tokyo's Nikkei lifted MSCI's world index to a 6-1/2-year intraday high that is about 1.5 percent away from the lifetime record set in late 2007.
Slower-than-expected manufacturing growth in the euro zone piled pressure on the ECB to act aggressively when it meets on Thursday, keeping the euro at a near four-month low versus the U.S. dollar.
The euro fell 0.2 percent to hit $1.3597, not far from a near four-month low of $1.358 touched last Thursday.
Extra pressure for the ECB to act aggressively came from German annual inflation data, which slowed to its weakest rate in nearly four years in May.
"The euro has been trading on the softer side in general as we go into the ECB meeting as there is some level of caution," said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York.
The greenback was broadly stronger. It rose 0.6 percent to 102.4 yen and a gauge of the dollar against a basket of major currencies rose 0.3 percent.
The relative strength in the dollar weighed on oil prices, but copper jumped as China's manufacturing activity expanded at the fastest pace in five months in May, raising expectations of an increase in demand.
Three-month copper on the London Metal Exchange climbed 1.3 percent to $6,932.50 a tonne. The metal gained 3.1 percent in May, its first monthly advance since December.
U.S. crude prices fell 0.3 percent to $102.44 a barrel, and Brent lost 0.6 percent to $108.80.
With risk appetite strong, safe-haven gold slid for a fifth straight session. Spot gold was down 0.6 percent at $1,243 an ounce after earlier hitting a four-month low of $1,240.69.
(Reporting by Rodrigo Campos; Additional reporting by Ryan Vlastelica and Richard Leong; Editing by Chizu Nomiyama and Leslie Adler)