GLOBAL MARKETS-Dollar at 7-year high vs yen after U.S. vote
* Republicans seize control of U.S. Senate in election rout
* Dow, S&P 500 set record closing highs, Europe jumps 1.7
pct
* Crude prices rebound on surprise fall in inventories
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Nov 5 (Reuters) - The dollar surged to a
seven-year high against the yen and global equity markets
rallied on Wednesday after the Republican Party seized control
of the U.S. Senate in midterm elections, auguring well for
pro-energy and other business policies.
The Dow and S&P 500 finished at record closing highs on the
sweeping Republican victory that dealt a punishing blow to
President Barack Obama, who is expected to limit his legislative
agenda in his last two years in office.
The beaten-down energy sector was the second-biggest
gainer of the S&P 500's 10 sectors, rising 1.75 percent. The
Republican majority in the Senate could lead to approval of oil
and natural gas pipelines and reforms for crude and natural gas
export laws. Utilities rose 2.31 percent.
"In the end, the results were pretty decisive," said John
Carey, a portfolio manager at Pioneer Investment Management in
Boston. "That's good news for the industries that had been
subject to regulatory issues."
MSCI (NYSE: MSCI - news) 's all-country world stock index rose
0.31 percent. Stocks in Europe rose about 1.7 percent, helped by
solid company results such as British retailer Marks & Spencer (Other OTC: MAKSF - news)
, whose shares surged 9.7 percent.
The Dow Jones industrial average closed up 100.69
points, or 0.58 percent, to 17,484.53. The S&P 500 gained
11.47 points, or 0.57 percent, to 2,023.57 and the Nasdaq
Composite lost 2.92 points, or 0.06 percent, to
4,620.72.
The pan-European FTSEurofirst 300 blue-chip index
rose 1.69 percent to close at 1,348.99. The blue-chip Euro STOXX
50 index rose 1.89 percent to close at 3,091.54.
Some traders said the rally in Europe could be short-lived
if European Central Bank chief Mario Draghi fails on Thursday to
unveil new stimulus measures to spur growth in the struggling
euro zone. Most euro zone bond yields edged up as investors
questioned if the ECB can boost the region's flagging economy.
Yields on 10-year German bunds rose to 0.826
percent.
The dollar rose to 114.84 yen, its highest level
since November 2007, and last traded at 114.73, up 1.01 percent.
The dollar index soared to 87.606, its highest
reading in more than four years, before paring gains to trade up
0.51 percent at 87.424.
The euro fell 0.47 percent to $1.2485.
U.S. Treasury debt yields rose after payroll processor ADP
reported solid U.S. private-sector job growth in October, but
later pared losses to trade flat.
The benchmark 10-year U.S. Treasury note
see-sawed in choppy trade, trading at break-even to yield 2.3424
percent.
The private jobs data comes ahead of the U.S. government's
release on Friday of its much broader monthly labor market
report.
Oil prices rose, with Brent rebounding from a four-year-low,
as traders reacted to rumors of a pipeline blast in Saudi Arabia
and bullish U.S. crude stocks data.
Data from the Energy Information Administration showed U.S.
crude inventories rose 460,000 barrels last week, significantly
less than the increase of 2.2 million barrels predicted by
analysts in a Reuters poll.
Brent crude for December settled up 13 cents at
$82.95 a barrel. U.S. crude futures rose $1.49 to settle
at $78.68 a barrel.
(Reporting by Herbert Lash; Editing by Chris Reese, Leslie
Adler and Dan Grebler)