KONTAN.CO.ID - NEW YORK/LONDON, Jan 24 (Reuters) - MSCI's global equity index rose on Wednesday, hitting its highest level in almost two years, backed by positive earnings and economic data in both Europe and the United States as well as optimism China stimulus will support its stock markets.

Treasury yields rebounded on Wednesday as investors demanded a higher risk premium after data showed U.S. business activity picking up in January and inflation appearing to abate before key data in coming days and a Federal Reserve meeting next week.

On Wall Street the benchmark S&P 500 inched up to a closing record for the fourth day in a row after hitting a new intraday high. It was helped by a surge in Netflix NFLX.O shares after the video streaming service smashed subscriber growth estimates and a rally in chip stocks after strong earnings from Dutch chipmaking equipment manufacturer ASML Holding ASML.AS.

In U.S. economic releases, S&P Global said its flash U.S. Composite PMI Output Index, tracking manufacturing and services sectors, rose to its highest level since June, driven by gains in both services and manufacturing.

"Three things really stand out as far as driving stocks today. They're charging higher after some good earnings, a decent set of purchasing manager indexes, and China's continued stimulus efforts," said Brian Jacobsen, chief economist at Annex Wealth Management.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 47 countries, was up 0.42%, after earlier hitting its highest intraday level since February 2022.

The Dow Jones Industrial Average .DJI fell 99.06 points, or 0.26%, to 37,806.39, the S&P 500 .SPX gained 3.95 points, or 0.08%, to 4,868.55 while the Nasdaq Composite .IXIC gained 55.98 points, or 0.36%, to 15,481.92.

Nasdaq, which closed near its session lows, was boosted by a 1.5% gain in the Philadelphia Semiconductor index .SOX as ASML's report drew investors to the sector broadly.

Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, said that after coming under pressure recently, "Nasdaq is playing a bit more catch-up today on the back of the semiconductor space."

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ASML had also helped cheer European investors, with the Europe 600 .STOXX index closing up 1.18%, for its biggest one-day percentage gain since mid-November.

Europe's data was mixed, with the manufacturing purchasing managers' index (PMI) showing a tough start to 2024 as euro zone business activity contracted while the outlook improved. Germany and France, the zone's biggest economies, saw improvements in manufacturing PMIs even as services deteriorated.

The European Central Bank (ECB) meets on Thursday and is widely expected to keep rates unchanged. The U.S. Federal Reserve is also expected to keep rates steady when it meets next week but investors will monitor for clues on rate-cut timing.

In Treasuries, the yield on benchmark 10-year Treasury notes US10YT=RR rose to 4.1762% compared with its U.S. close of 4.142% on Tuesday. The two-year yield US2YT=RR, which rises with traders' expectations of higher Fed fund rates, touched 4.3799% compared with a U.S. close of 4.348%.

In currencies, the dollar index =USD, which measures the greenback against six rivals, was down around 0.2%, eying its biggest daily percentage decline since Dec. 27. FRX/

Nevertheless, the index is up about 1.9% for January, nearing its strongest monthly gain since September as traders walked back expectations for early and steep Fed interest rate cuts.

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Japan's yen JPY= strengthened after the Bank of Japan signalled on Tuesday that it could exit stimulus in the coming months. The dollar fell 0.53% against the yen to 147.58 JPY=.

Earlier, China blue-chips .CSI300 had finished up 1.4%, but were still near five-year lows. Bloomberg reported that Chinese authorities were preparing measures worth $278 billion to stabilise the country's slumping stock market though some investors were sceptical.

In commodities, oil prices edged up on a bigger-than-expected U.S. crude storage withdrawal, a slump in U.S. crude output, Chinese economic stimulus, geopolitical tensions and a weaker dollar.

West Texas Intermediate crude futures CLc1 settled up 0.97%, or $0.72, at $75.09 a barrel. Brent crude LCOc1 ended up 0.62%, or $0.49, at $80.04. O/R

In precious metals, gold fell 0.79% to $2,012.59 an ounce after the data showing a U.S. business activity pickup, even as the weaker dollar limited losses.

(Reporting by Sinéad Carew in New York and Tom Wilson in London; additional reporting by Ankur Banerjee in Singapore; Editing by Chizu Nomiyama, David Evans and Rosalba O'Brien)

Editor: Hasbi Maulana