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U.S. stocks up in afternoon trading

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European shares set record closing high

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Swiss National Bank cuts rates by 25 basis points

(Updates to 3 p.m. ET/1900 GMT)

By Caroline Valetkevitch

NEW YORK, Sept 26 (Reuters) - A widely followed global

stock index and the S&P 500 hit record highs on Thursday after

chipmaker Micron Technology's ( MU ) upbeat forecast, while oil

dropped on a report that Saudi Arabia plans to dump its

unofficial crude price target of $100 a barrel.

Micron's forecast late on Wednesday bolstered optimism about

demand for chips used for artificial intelligence computing.

Micron's shares were up more than 15%, while an index of

semiconductors was up 3.6%.

U.S. Treasury yields edged higher after data showed that

U.S. jobless claims unexpectedly fell in the latest week,

leading traders to cut bets that the Federal Reserve will make

another 50-basis point cut at its November meeting.

Last week's rate cut by the U.S. central bank was its first

reduction in borrowing costs since 2020.

"There's a lot of focus on the labor market in terms of what

the Fed is going to do next," said Zachary Griffiths, senior

investment grade strategist at CreditSights.

Also on Thursday, revised government data showed the U.S.

economy grew more quickly than initially thought in 2023.

Investors anxiously await Friday's release of the core personal

consumption expenditures (PCE) price index - the Fed's preferred

measure of inflation.

The Dow Jones Industrial Average rose 263.68 points,

or 0.63%, to 42,178.43, the S&P 500 rose 21.70 points, or

0.38%, to 5,743.88 and the Nasdaq Composite rose 102.68

points, or 0.57%, to 18,184.89.

European shares followed China's market higher. The

pan-European STOXX 600 index closed 1.3% higher at

525.61 points, an all-time closing high. MSCI's gauge of stocks

across the globe rose 7.42 points, or 0.88%, to

851.03 and hit a record intraday high.

In Europe, China-exposed stocks such as luxury and miners

outperformed.

An official readout from a meeting of China's politburo said

China would deploy "necessary fiscal spending" to meet this

year's economic growth target of roughly 5%, acknowledging new

problems and raising market expectations for fresh stimulus on

top of measures announced this week.

Reuters reported separately that China plans to issue

special sovereign bonds worth about 2 trillion yuan ($284

billion) this year primarily to stimulate consumption.

U.S. crude fell $2.02 to settle at $67.67 a barrel

and Brent fell $1.86 to settle at $71.60.

Saudi Arabia is preparing to abandon its unofficial price

target of $100 a barrel for crude as it gets ready to increase

output, the Financial Times reported on Thursday, citing people

familiar with the matter.

In Treasuries, the yield on benchmark U.S. 10-year notes

rose 1.3 basis points to 3.794%, from 3.781% late on

Wednesday.

Traders are now pricing in a 56% probability that the Fed

will cut rates by 50 basis points at the conclusion of its Nov.

6-7 meeting, down from 63% before the data, according to the CME

Group's FedWatch Tool.

The dollar was down in choppy trading after the U.S. data

indicated a relatively healthy economy, while the Swiss franc

rose after the country's National Bank cut rates.

The Swiss National Bank cut rates by 25 basis points on

Thursday, choosing not to go for a larger 50-bp move that

markets had seen as a possibility. It was the SNB's third such

move this year.

Against the Swiss franc, the dollar weakened 0.56% to

0.846.

Elsewhere, policy doves at the European Central Bank are

preparing to fight for an interest rate cut next month after a

string of weaker-than-expected economic data, a move likely to

meet resistance from their more conservative peers, seven

sources told Reuters.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

fell 0.42% to 100.53, with the euro up 0.42% at $1.1179.

Against the Japanese yen, the dollar weakened 0.09%

to 144.62.

(Additional reporting by Alun John in London and Karen Brettell

in New York; Editing by Sam Holmes, Andrew Heavens, Hugh Lawson,

Will Dunham and Sharon Singleton)