BCS Barclays PLC

By Riva Gold 

The Dow Jones Industrial Average was on track for a 10th consecutive day of records Thursday as concerns about higher U.S. interest rates and the French election continued to fade.

Futures pointed to a 0.1% opening gain for the blue-chip index, following quiet sessions in Europe and Asia. The Dow posted its longest streak of record closes since 1987 on Wednesday, while a measure of world stocks climbed to all-time highs.

Hopes for stronger growth, higher inflation and friendly fiscal policy from the new U.S. administration have fueled the recent rally.

"Growth momentum has improved since last summer, and on top of that, the biggest economy in the world has a new president saying he's willing to spend money," said Florian Ielpo at Swiss fund manager Unigestion.

"We're still very positive on the world economy, not only because of what's happening in the U.S. right now with leading indicators spiking up, but Europe seems to be doing decently and emerging markets seem to have stabilized if not improved," he added.

Data Thursday showed Germany's budget surplus hit its highest mark since unification, shortly after a reading showed the eurozone economy is growing at its fastest rate in more than six years. Germany's DAX was flat midday Thursday after its highest close since April 2015.

Some investors were more cautious, however, noting stocks were getting expensive despite a range of political risks on the horizon.

"It feels to me like the market is pricing in a lot more optimism than it should be," said David Lafferty, chief strategist at Natixis Global Asset Management.

"We have the most controversial president in history, the U.K. is leaving the EU, there are existential risks in France, high valuations...and volatility is low," he said.

On Thursday, waning concerns around the French election offered relief to French government bonds and stemmed a recent decline in the euro.

Centrist candidate François Bayrou announced his offer of an alliance with independent centrist Emmanuel Macron on Wednesday, helping diminish some investors' fears of a victory for anti-euro candidate Marine Le Pen.

French 10-year yields fell to 0.972% from 1.025% Wednesday, while their German counterparts were little changed at 0.262% from 0.272%. Yields move inversely to prices.

The euro was last up 0.1% at $1.0553 after snapping a three-session losing streak on Wednesday.

Global investors were also digesting the latest Federal Reserve meeting minutes, where officials suggested that lifting U.S. interest rates "fairly soon" may be appropriate in light of an improving economy.

The minutes did little to lift expectations for a rate rise in March, with U.S. government bonds strengthening and the dollar ending the day with modest declines. The WSJ Dollar Index was last flat, while 10-year Treasury yields edged lower to 2.403% from 2.416%.

Arthur Kwong, head of Asia Pacific equities at BNP Paribas Investment Partners, said the firm is trying to stick with its assumption that there will be three rate increases this year, "but I think the feeling is getting more there may be only two."

Banks and financials mostly declined across Asia amid disappointment there wasn't a clearer signal on rate rises, causing Japan's Nikkei to end flat and Hong Kong's Hang Seng Index to shed 0.4%, after briefly rising to its highest level since September. Higher interest rates tend to boost banks' profitability.

Shanghai shares pulled back on losses in infrastructure stocks, as well as reports that the government plans to ban futures companies from asset-management businesses--though analysts are skeptical that it will carry out such drastic measures.

In Europe, oil and gas companies were among the best performers as Brent crude oil jumped 1.4% to $56.81 a barrel.

Shares of Barclays PLC rose over 3% after the U.K. bank swung to a full-year net profit and said it was just months away from finishing a restructuring.

Ese Erheriene,

William Horobin

,

Yifan Xie

, David Harrison and Hiroyuki Kachi contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

February 23, 2017 07:32 ET (12:32 GMT)

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