Wall St retains momentum despite weak data; euro firm

Wall Street stocks ignored dour US economic data to keep February's rally alive on Tuesday, while the euro remained firm in anticipation of an injection of cheap cash from the European Central Bank.

Oil prices edged lower for a second day after Monday's correction, which snapped a week-long rally.

US Treasuries rallied as the government reported that new orders for durable goods fell in January by the most in three years, suggesting the US economy started the year on a weaker-than-thought footing.

The S&P 500 index hovered at the 1,370-point level it has been tracking over the past fortnight, ignoring the durable goods data and a separate report showing a decline in home prices in December.

"The way that this market has been rallying ... (traders) don't care, and that's the bullish sentiment. It will matter eventually, but not now," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The Dow Jones industrial average was up 31.97 points, or 0.25%, at 13,013.48. The Standard & Poor's 500 Index was up 4.76 points, or 0.35%, at 1,372.35. The Nasdaq Composite Index was up 18.44 points, or 0.62%, at 2,984.60.

Wall Street's strength was shadowed by a rebound in world stocks and a recovery in European shares.

Global stocks, measured by the MSCI ACWI, rose 0.22%. The FTSEurofirst 300 index of leading European shares was near flat after being down 0.3% earlier.

The euro was lifted by the European Central Bank's looming cash boost for banks, even as some investors worried that the benefits of a second injection of cheap money may be short-lived.

The single currency was at USD 1.3405 to the dollar, within view of Friday's three-month peak of USD 1.3487.

Markets expect European banks to borrow about 500 billion euros of the cheap funds on offer from the ECB on Wednesday, although forecasts range from 200 billion to 750 billion euros.

"The euro has priced in a cash injection of 500 billion euros and anything above 600 billion will be risk positive and push the euro higher," said Ankita Dudani, G-10 currency strategist at RBS Global Banking.

The benchmark 10-year US Treasury note was up 6/32, its yield at 1.9031%, as the weaker US economic data fed demand for safe-haven government debt. "People looked at the durable goods and said: 'That's shocking,'" said Trevor Coote, head of equity sales at Alexander David Securities.

While the durable goods data was disappointing, analysts did not think it was a game changer.

"When you look at all the details, the headline was weak, the core orders were weak. It's pretty hard to spin this as anything other than a slight disappointment, emphasis on slight," said Nick Bennenbroek, head of FX Strategy at Wells Fargo in New York.

In energy markets, Brent crude oil futures slipped to around USD 123 a barrel from highs above USD 125.50 late last week, ending a surge that had dampened demand for other commodities and slowed gains in global stock prices.