By Herbert Lash
NEW YORK(Reuters) - Global equity markets extended a rally on Monday that drew strength from a forecast-beating U.S. jobs report last week that bolstered confidence in the American economy and the Federal Reserve's monetary policy, but the dollar gave up some of its gains.
Brazil's benchmark stock index jumped more than 5 percent after a pro-business candidate surged to a strong finish in Sunday's presidential election, setting the stage for what looms as a tight runoff against leftist President Dilma Rousseff.
The Bovespa (BVSP) was up 5.3 percent.
Friday's U.S. non-farm payrolls report fueled speculation that the Fed will hike interest rates by mid-2015 and helped the dollar notch its 12th straight week of gains. The dollar index slipped but still was trading near four-year highs, making the currency's 12 straight weeks of gains since early July the longest in over 40 years.
Treasury prices rose, as did the price of gold after it touched a 15-month low earlier in the day.
Merger activity and corporate restructuring helped U.S. equities as the S&P 500 advanced above its 50-day moving average for the first time since September 29, a sign that near-term momentum is improving.
"The recovery is alive and well, and while there are still risks we need to keep an eye on, fundamentals suggest we're in pretty good shape and could continue to move higher," said John Carey, portfolio manager at Pioneer Investment Management in Boston.
MSCI's all-country world index (MIWD00000PUS) of equity performance in 45 countries rose 0.48 percent, while the pan-European FTSEurofirst 300 (FTEU3) index gained 0.2 percent.
On Wall Street, the Dow Jones industrial average (DJI) was up 31.85 points, or 0.19 percent, at 17,041.54. The Standard & Poor's 500 Index (SPX) was up 1.99 points, or 0.10 percent, at 1,969.89. The Nasdaq Composite Index (IXIC) was down 6.91 points, or 0.15 percent, at 4,468.71.
Euro zone bond yields fell after data showed German industrial orders dropped at their fastest rate since 2009 in August, reviving expectations of further monetary easing.
U.S. Treasuries yields edged lower on the weak European economic data and the notion that modest growth in U.S. hourly earnings could delay the Fed from raising U.S. interest rates.
U.S. government bond prices rose, with the 10-year U.S. Treasury note (US10YT=RR) up 3/32 in price to yield 2.4358 percent.
The dollar's rally took a breather on profit-taking.
The dollar index <.DXY>, which tracks the greenback against six major currencies, was last down 0.49 percent at 86.266.
Against the yen, the greenback was down 0.46 percent at 109.25 yen
Brent crude oil dropped below $92 a barrel.
Brent for November
(Reporting by Herbert Lash; Additional reporting by Emelia Sithole-Matarise in London; Editing by Dan Grebler)