Reuters: US Dollar Report: GLOBAL MARKETS-Euro, stocks rise on earnings, solid debt sales

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GLOBAL MARKETS-Euro, stocks rise on earnings, solid debt sales Apr 24th 2012, 18:55 Tue Apr 24, 2012 2:55pm EDT * Global equities stage modest recovery, euro recovers * Hints of stabilizing U.S. housing markets boost sentiment * Debt prices fall but safe-haven assets still in demand * Spanish, Dutch, Italian debt auctions go smoothly By Herbert Lash NEW YORK, April 24 (Reuters) - Strong corporate earnings drove global equities higher o n T uesday, while the euro rose after solid demand at European government debt sales eased concerns about the euro zone's growing economic slump. Yields fell on Dutch, and Spanish and Italian debt as sales were well-received, calming markets a day after the Dutch government collapsed in a crisis over budget cuts. Data on the U.S. housing market also boosted optimism about the U.S. economic recovery and helped stoke risk appetite. Big U.S. manufacturers continued a wave of strong earnings growth, with United Technologies Corp, 3M Co, Illinois Tool Works and Parker-Hannifin Corp posting results that topped Wall Street forecasts. [ID:nL2E8FO1PI} Recovering U.S. demand helped the four companies offset the weak European economy and slowing growth in China, which until recently had been a reliable source of rapid growth for big American companies. AT&T Inc also beat forecasts, and its stock advanced 4.0 percent. With 153 components of the S&P 500 Index having reported their results, more than three-fourths topped expectations, according to Thomson Reuters data. "These results serve as a reminder that while near-term volatility is all but certain, the strength of corporate America remains intact, and valuations remain attractive," said Mark Martiak, senior wealth strategist at Premier/First Allied Securities in New York. Stocks rose on Wall Street. The Dow Jones industrial average was up 74.77 points, or 0.58 percent, at 13,001.94. The Standard & Poor's 500 Index was up 4.25 points, or 0.31 percent, at 1,371.19. The Nasdaq Composite Index was down 14.92 points, or 0.50 percent, at 2,955.53. In Europe, shares rebounded as companies posted bullish updates, such as French tire maker Michelin, which rose 6.1 percent. The FTSEurofirst 300 index of top European companies closed up 1.1 percent to 1,032.50, a day after hitting a three-month low. Bill Dinning, head of strategy at Kames Capital, said there did not seem to be any doubt that companies are in robust health. "That's reflected in strong earnings, in high levels of margins and in very strong balance sheets," he said. Global shares as measured by the MSCI world equity index rose 0.4 percent to 322.64. The euro rallied against the dollar after two U.S. housing reports eased worries about the U.S. economic recovery while stoking risk tolerance at the start of a two-day meeting of Federal Reserve policymakers. "We're really seeing the euro gain a footing," said David Song, currency analyst at DailyFX. "Market participants are taking on more risk on the positive housing data." U.S. single-family home prices rose in February for the first time in 10 months, according to the closely watched S&P/Case-Shiller report. A composite index of prices in 20 U.S. metropolitan areas gained 0.2 percent in February on a seasonally adjusted basis, Case Shiller said, matching economists' forecasts. A separate Commerce Department report showed new single-family home sales sagged in March to their lowest level in four months, but sales in the prior three months were revised higher than initially reported. The euro, which had its worst day in a week on Monday, gained about 0.3 percent to $1.3189. The U.S. dollar was down against a basket of major trading-partner currencies, with the dollar index down 0.25 percent at 79.218. U.S. Treasury debt prices dipped on easing political concerns regarding France and the Netherlands, while investors waited for U.S. debt sales and results from the Fed meeting. The benchmark 10-year U.S. Treasury note was down 5/32 in price to yield to 1.96 percent. The sudden collapse of the Dutch government as it tried to cut its budget, a rise in the vote for populist parties in the French election and business outlook data indicating Europe's recession has months to run have shifted sentiment this week. "Institutional investors are finding it quite difficult making a decision on where to invest in Europe right now," said Ian Stannard, head of European FX strategy at Morgan Stanley. A widely watched auction of fresh debt by the Dutch government went off smoothly even though ratings agency Moody's warned the country's AAA rating could be at risk if the there was any weakening in the commitment to fiscal discipline from the political turmoil there. Spanish and Italian bond auctions were well covered, but their borrowing costs rose again, showing political uncertainty was still uppermost in investors' minds. Brent crude was a little weaker, below $119, as lingering concerns over the euro zone economy overshadowed the latest production problems at the UK's largest oilfield. Brent crude futures dipped 53 cents to $118.18 a barrel. U.S. crude futures rose 40 cents to $103.51. Link this Share this Digg this Email Reprints

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