Global equities edge up, gold firm after jobs, services data

By Caroline Valetkevitch

NEW YORK (Reuters) - Global equity markets edged higher on Wednesday as U.S. services sector data that showed a pickup in growth was offset by a weaker-than-expected U.S. private jobs report, while gold prices firmed.

The mixed data left investors uncertain over the pace of the U.S. recovery and Wall Street stocks lower, adding to a recent slide that investors speculate could be part of a long-awaited correction.

Two private surveys showed an uptick in U.S. growth in January. The Institute for Supply Management showed that growth picked up in the dominant U.S. service sector in January, with steady strength in private-sector hiring, while Markit's report on service-sector activity showed growth quickened to a four-month high in January and hiring remained robust.

Separately, the ADP National Employment Report showed U.S. private employers added 175,000 jobs in January, just shy of analysts' expectations.

Markets have been volatile in recent weeks on concerns about demand and turmoil in emerging market currencies.

Calmer markets in vulnerable emerging nations like Turkey, South Africa and Russia helped to offset some of the market jitters, along with Markit's euro zone Composite PMI, which showed the 18-member bloc's recovery becoming increasingly broad-based.

The Dow Jones industrial average was off its lows, down 7.35 points, or 0.05 percent, at 15,437.89. The Standard & Poor's 500 Index was down 4.07 points, or 0.23 percent, at 1,751.13. The Nasdaq Composite Index was down 17.69 points, or 0.44 percent, at 4,013.83.

A global equity index was up 0.1 percent, as was an index of European shares. MSCI's emerging markets index was down just 0.15 percent.

"It will be a buying opportunity when investors feel comfortable this rout we're in is over," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "I don't think they want to step in front of it just yet until they have a feeling of where the bottom is going to be. We're not there yet."

The ADP report precedes Friday's highly anticipated U.S. government's monthly payrolls report.

U.S. Treasuries yields rose as investors bet that the report will come in relatively strong.

"I think that most participants are looking for a stronger number, mainly so they can buy at higher yields," said Thomas di Galoma, co-head of fixed-income rates at ED&F Man Capital in New York.

Benchmark 10-year Treasuries yields were just above 2.65 percent, after falling from more than 3 percent at the beginning of the year as investors flee emerging market assets and stocks tumble, increasing the safe-haven demand for U.S. government debt. The 10-year U.S. Treasury note was down 11/32 in price, the yield at 2.6639 percent.

Weakening economic data has increased views that the Federal Reserve may ease reductions in its bond purchase program if the economy worsens, though many market participants say the data needs to change considerably from current levels to alter the Fed's plans.

In the foreign exchange market, a dollar index briefly rose to session highs after the ISM data. The dollar index, which measures the greenback against a basket of major currencies, touched a session high of 81.240 before slipping back into negative territory at 81.054, down 0.08 percent on the day.

GOLD, OIL PRICES FIRM

Spot gold rose as much as 1.5 percent to a session high of $1,273.26 an ounce after the U.S. data. It was last up 0.3 percent at $1,257.80.

Oil prices edged higher. A U.S. industry report showed lower inventories and robust heating fuel demand due to cold weather in the United States.

The American Petroleum Institute's report on Tuesday showed crude stocks at the Cushing, Oklahoma, hub fell by 1.6 million barrels last week and distillates by 1.5 million barrels. Distillates include heating oil.

Brent crude was up 45 cents at $106.23 and U.S. crude was up 14 cents to $97.33.

(Additional reporting by Karen Brettell and Rodrigo Campos in New York; Editing by Catherine Evans and Dan Grebler)