Reuters: US Dollar Report: GLOBAL MARKETS-Stocks, commodities rally on stimulus hopes

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GLOBAL MARKETS-Stocks, commodities rally on stimulus hopes Jun 6th 2012, 14:18 Wed Jun 6, 2012 10:18am EDT * Hopes of more stimulus measures boost sentiment * ECB holds rates steady, dashes hope for more LTRO loans * Brent crude rallies above $100 a barrel, gold up 1 pct By Wanfeng Zhou NEW YORK, June 6 (Reuters) - World stocks, commodities and the euro rallied on Wednesday as European officials urgently explored ways to rescue Spain's debt-laden banks and expectations grew major central banks would act to bolster a slowing global economy. But comments from European Central Bank President Mario Draghi offset some of the optimism after he dashed hopes for more long-term, cheap loans, saying it was not up to the ECB to make up for other institutions' lack of action. The ECB resisted pressure to provide more support for the euro zone's ailing economy at its regular monthly policy meeting by holding its main interest rate steady at 1 percent. "Markets again look to central bankers like dogs to pieces of meat. Will the dog get the meat and will it taste as good?" said Peter Boockvar, equity strategist at Miller Tabak in New York. "Draghi didn't bring the meat the market dogs were hoping for as he seems to be standing pat for now, likely waiting for more stress to develop before announcing something new of substance." The debt crisis in Europe showed signs of escalating after Spain, the euro zone's fourth-biggest economy, said on Tuesday it was effectively losing access to credit markets due to prohibitive borrowing costs and appealed to European partners to help revive its banks. Recent disappointing economic data from the United States and China, as well as signs of a euro area slowdown, have been piling up pressure on the world's central banks to make some response. "The market's expectation regarding further policy action globally is picking up," said Ian Stannard, an executive director at Morgan Stanley. "We could well see easing taking place throughout many of the G10 countries," he said. "We believe that quantitative easing from the Fed is also very much back on the table." Atlanta Fed President Dennis Lockhart said on Wednesday the Federal Reserve may need to consider additional monetary easing if a wobbly U.S. economy falters or Europe's troubles generate a broader financial shock. Investors are waiting for Federal Reserve Chairman Ben Bernanke's testimony before the U.S. congressional Joint Economic Committee on Thursday. U.S. stocks rallied at the open. The Dow Jones industrial average was up 119.69 points, or 0.99 percent, at 12,247.64. The Standard & Poor's 500 Index was up 13.77 points, or 1.07 percent, at 1,299.27. The Nasdaq Composite Index was up 35.24 points, or 1.27 percent, at 2,813.35. The MSCI World Equity Index jumped 1.5 percent. The pan-European FTSEurofirst 300 index rose 1.8 percent. The euro gained 0.4 percent to $1.2497, well off the near two-year low of $1.2286 set on Friday, but the single currency retreated from a session high of $1.2528 on Reuters data. "It appears no more Band-aids are forthcoming from the (European) central bank, which has disappointed some euro bulls," said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida. Brent crude surged to an intra-day high of $100.90 a barrel before easing back to $100.72, up $1.88. U.S. crude climbed $1.30 to $85.59. Gold rose more than 1 percent to $1,634.09 an ounce. The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 1.6116 percent. Link this Share this Digg this Email Reprints

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