Stocks climb as Draghi fuels stimulus hopes, euro dips

NEW YORK (Reuters) - World stock indexes rose and the euro fell on Wednesday after European Central Bank President Mario Draghi renewed a pledge to keep monetary policy loose for an extended period.

A recovery in Russian and Chinese shares also helped emerging markets halt a near-unbroken three-week run of falls.

Draghi renewed a pledge to keep monetary policy accommodative for as long as it takes to push ultra-low inflation in the euro zone closer to 2 percent.

Investors, however, have been rattled by this week's worse-than-expected economic data from euro zone countries, leaving Europe's equity markets pretty much where they began the month.

There was more bad news on Wednesday, with German business sentiment dropping for a fifth straight month in September to its lowest level since April 2013 and the Bank of Spain warning that Spanish private consumption growth and new job creation were likely to have slowed in the third quarter.

Despite the weak European data, MSCI's global share index was up 0.3 percent, while European shares ended up 0.8 percent.

The MSCI emerging stocks index edged up 0.3 percent as it attempted to make only its second daily gain in 15 sessions.

U.S. equities resumed their climb. The Dow Jones industrial average was up 123.97 points, or 0.73 percent, at 17,179.84. The Standard & Poor's 500 Index was up 11.59 points, or 0.58 percent, at 1,994.36. The Nasdaq Composite Index was up 38.56 points, or 0.86 percent, at 4,547.25.

"This is a market that continues to attract capital from other asset classes, because where else can investors go for yield?," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Also helping U.S. stocks was a strong report on the housing market.

In the foreign exchange market, the euro sank 0.4 percent to a 14-month low under $1.28 and was last at

$1.2788.

U.S. Treasuries yields were little changed on a lack of clarity surrounding Federal Reserve monetary policy. Benchmark U.S. 10-year Treasury notes were last down 6/32 in price to yield 2.55 percent, from 2.53 percent late Tuesday.

German bond yields inched lower following the German data.

Brent crude fell for a third day, with futures for November delivery down 53 cents at $96.32 a barrel, slipping further on inflated supplies and weak economic data from Europe. U.S. crude was up 41 cents at $91.97.

The pick-up in Russian and Chinese shares boosted emerging markets while the U.S.-led air strikes in the Middle East pushed investors toward safe-haven assets, cooling the recent pressure on emerging markets from rising global bond yields.

Shanghai shares also finished at their highest in more than 1-1/2 years.

(Reporting by Caroline Valetkevitch; Additional reporting by Blaise Robinson, Lionel Laurent; John Geddie in London and; Chuck Mikolajczak in New York.; Editing by Dan Grebler and Toby Chopra)