Upbeat company earnings lifted US and European stock prices yesterday, with the Dow and Standard & Poor’s 500 setting record highs, while the dollar reached a four-month peak on bets the US Federal Reserve may raise interest rates by year-end.

The impressive run in major equity markets around the globe led investors to reduce their safe-haven positions in US and German government debt, sending their yields higher.

Oil prices fell to a two-month low before US data that may signal whether a supply glut in the top consuming country was easing.

“For the rally to sustain we are going to need to see continued improvement in the earnings and economic activity,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

Shortly after their open, the Dow Jones industrial average was up 14.72 points, or 0.08 per cent, to 18,573.73, the S&P 500 was up 3.23 points, or 0.15 per cent, to 2,167.01 and the Nasdaq Composite was 27.29 points, or 0.54 per cent higher, at 5,063.66.

Microsoft and Morgan Stanley were the latest US companies whose quarterly results topped analysts estimates.

Across the Atlantic, SAP, Europe’s largest software group, and ASML Holding, a supplier to semiconductor makers, reported quarterly results that beat forecasts.

They helped propel Europe’s broad FTSEurofirst 300 index up 0.58 percent to 1,340 points.

The MSCI world equity index , which tracks shares in 45 nations, rose 0.65 points or 0.16 per cent, to 411.48.