(Adds U.S. market open, byline; changes dateline; previous
LONDON)
* MSCI world, Wall Street indexes touch new highs
* Sterling heads for worst week since late 2017
* U.S. Treasury yields rise on growth outlook
By Herbert Lash
NEW YORK, Dec 20 (Reuters) - A year-end rally in global
equity markets extended gains on Friday, helped by data showing
relatively strong U.S. growth, while sterling headed toward its
worst week in more than two years on concerns over how Britain
will leave the European Union.
The dollar firmed and U.S. Treasury yields rose after the
Commerce Department said gross domestic product increased at a
2.1% annualized rate in the third quarter, as expected, with
consumer spending coming in stronger than previously reported.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.39% to a record high, while Wall Street's three key
equity indices on also marked new highs.
The preliminary U.S.-China trade deal and the Federal
Reserve's increase of short-term liquidity in the repo market
allowed risk assets to move higher, said Yousef Abbasi, global
market strategist at INTL FCStone Financial Inc in New York.
"The deliverance of phase one of a trade deal and the Fed
getting ahead of any potential systemic-type issues has cleared
the path for this market to inch higher," Abbasi said. "There
isn't anything that can shift sentiment dramatically."
The benchmark S&P 500 extended its run of record highs to
seven straight sessions, its longest streak in more than two
years.
The Dow Jones Industrial Average .DJI rose 119.33 points,
or 0.42%, to 28,496.29. The S&P 500 .SPX gained 18.28 points,
or 0.57%, to 3,223.65 and the Nasdaq Composite .IXIC added
38.20 points, or 0.43%, to 8,925.41.
European shares also rallied, with the pan-European STOXX
600 index .STOXX rising 0.70%. Indexes in Frankfurt .GDAXI ,
Paris .FCHI and London .FTSE all made similar gains in thin
trading.
Emerging market stocks rose 0.15%.
Overnight in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS added a sliver, having
risen 1.2% so far this week and almost 5% this month.
Some data, however, reminded investors of potential weak
spots in the world economy.
The mood among German consumers deteriorated unexpectedly
heading into January, a survey showed, suggesting that household
spending in Europe's largest economy could weaken at the
beginning of next year. Sterling GBP= was last trading at $1.3048, up 0.32% on the
day after suffering a sharp reversal that left it facing its
worst weekly fall since late 2017 of about 2%.
The pound slipped overnight to below $1.30, a dramatic drop
from a 19-month peak of $1.3514 after British Prime Minister
Boris Johnson used his sweeping election victory last week to
revive the risk of a hard Brexit. Britain will leave the EU at the end of January and has set
December 2020 as a hard deadline to reach a trade agreement.
The dollar index .DXY rose 0.3%, with the euro EUR= down
0.42% to $1.1073. The Japanese yen JPY= weakened 0.08% versus
the greenback at 109.47 per dollar.
Oil prices fell but were set for a third straight week of
gains after the easing of the U.S.-China trade dispute boosted
investor confidence and the outlook for global economic growth.
Brent LCOc1 was down 71 cents at $65.83 a barrel, while
West Texas Intermediate crude CLc1 slid 91 cents to $60.27 a
barrel.
Gold clung to a narrow $5 range. Spot gold XAU= dropped
0.2% to $1,476.44 an ounce.