Reuters: US Dollar Report: GLOBAL MARKETS-Earnings boost stocks; Spain yields up

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GLOBAL MARKETS-Earnings boost stocks; Spain yields up Apr 27th 2012, 15:54 Fri Apr 27, 2012 11:54am EDT * Spain, Italy yields edge higher after Spanish downgrade * Italy calms nerves by selling almost 6 bln euros of bonds * Lower-than-expected U.S. GDP leaves Fed easing door open By Luciana Lopez NEW YORK, April 27 (Reuters) - Strong earnings reports buoyed global equities o n F riday, outweighing disappointing U.S. growth data and an uptick in Spanish and Italian yields after a two-notch downgrade of Spain's sovereign credit rating. European stocks closed at a better than one-week high and U.S. stocks extended an earnings-driven rally despite choppiness early in the New York session after data showed first-quarter U.S. economic growth cooled. "Earnings have been spectacular, and that's a shot in the arm to investors, but GDP is acting as a counterweight," said David Dietze, president and chief investment strategist at Summit, New Jersey-based Point View Wealth Management. "When coupled with other weak data, the ghost of a slowdown starts to loom and that's causing investors to pause a little despite better-than-expected results from blue chips like Amazon." The U.S. economy, the world's largest, expanded at a 2.2 percent annual rate in the first three months of the year, below economists' expectations of a 2.5 percent pace. The data was "certainly a bit of a mixed picture," said Camilla Sutton, chief currency strategist at Scotia Capital. "It does open the door for the Fed to remain dovish." The Dow Jones industrial average gained 28.50 points, or 0.22 percent, at 13,233.12. The Standard & Poor's 500 Index was up 1.93 points, or 0.14 percent, at 1,401.91. The Nasdaq Composite Index was up 13.10 points, or 0.43 percent, at 3,063.71. The FTSEurofirst 300 index rose 0.59 percent to close at 1,050.43. Investors pushed Spain's 10-year borrowing rate briefly above 6 percent, after Standard & Poor's late o n T hursday cut Spain's credit rating to BBB plus on concern about the government's exposure to its ailing banks. Spanish data released Friday highlighted the extent of economic weakness in the highly indebted country, with nearly a quarter of the nation's work force unemployed and retail sales falling for the 21st consecutive month. Yields on Spain's 10-year bond slipped later to around 5.905 percent. Italian yields were also slightly higher, but nerves eased as Italy sold 5.95 billion euros of new bonds without incident, though at higher rates. The benchmark 10-year U.S. Treasury note was little changed, down 1/32, the yield at 1.9506 percent. The euro edged higher, lifted by the possibility the U.S. Federal Reserve could launch another round of quantitative easing, which would be dollar negative. The euro has been range-bound recently, trading largely within $1.3 to $1.34 for much of the year. The single currency rose 0.32 percent to $1.3250 against the greenback, while the dollar lost 0.69 percent to 80.45 yen. While the Bank of Japan increased bond buying and made other changes to its purchase program, the measures were seen as incremental rather than significant steps to try to dig the Japanese economy out of the doldrums. Oil dropped on the Spanish downgrade but pared losses on revived hopes of further liquidity injections from the Fed. Brent crude, widely viewed as a global oil benchmark, fell 0.58 percent to $119.22 per barrel. U.S. crude oil dropped 0.32 percent to $104.22 a barrel. Link this Share this Digg this Email Reprints

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