Reuters: US Dollar Report: GLOBAL MARKETS-Euro rises on talk ECB rate cut unlikely, stocks gain

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GLOBAL MARKETS-Euro rises on talk ECB rate cut unlikely, stocks gain Nov 6th 2013, 20:10 Share this Email Print Reprints Wed Nov 6, 2013 3:10pm EST * Euro regains footing, but ECB under pressure to boost stimulus * Wall St gains on expectations Fed to keep rates at near zero * European shares inch up to new 5-year highs * Oil rises to $106/bbl, lifted by Libya, product supply drops By Herbert Lash NEW YORK, Nov 6 (Reuters) - Global stock markets rose on Wednesday and the Dow industrials hit a record intraday high on strong German data and talk the Federal Reserve may keep rates low longer than expected, while speculation that the European Central Bank won't cut rates this week lifted the euro. Stronger-than-expected German industry orders affirmed expectations the ECB would keep rates unchanged on Thursday despite a steep fall in inflation, helping push the euro up 0.3 percent to $1.3518.. Surveys that showed only modest growth in German and French businesses, however, were likely to cap euro gains, traders said, and would probably convince the ECB to maintain a dovish tone at Thursday's monetary policy meeting. Wall Street rose after John Williams, president of the San Francisco Federal Reserve Bank, said late on Tuesday the Fed should wait for stronger evidence of economic growth before winding down its massive bond-buying program. Two of the Fed's top staff economists made the case in new research papers for more aggressive action by the U.S. central bank to drive down unemployment by promising to hold interest rates lower for longer. The notion of lower interest rates for longer helped lift the Dow industrials to a record intraday high, while a Reuters report that Microsoft had narrowed its CEO search lifted shares in the tech giant and buoyed the S&P 500 index. "What's seeping into the market is the increasing likelihood (the Fed) will keep zero percent interest rates for 18 months longer than they had signaled previously," said Steven Einhorn, vice chairman at hedge fund Omega Advisors Inc., which oversees about $9.7 billion in assets. The Fed has concluded that its bond-buying is no longer that effective, and the size of its balance sheet is getting to be problematic, Einhorn said. All three major U.S. stock indexes initially rose, but the Nasdaq later retreated, with a 15.4 percent decline in shares of Tesla Motors Inc the biggest drag after it reported weaker-than-expected earnings late Tuesday. The Dow Jones industrial average was up 102.01 points, or 0.65 percent, at 15,720.23. The Standard & Poor's 500 Index was up 6.21 points, or 0.35 percent, at 1,769.18. The Nasdaq Composite Index was down 9.00 points, or 0.23 percent, at 3,930.86. In Europe, the FTSEurofirst 300 of leading regional shares rose 0.39 percent to close at 1,296.58, after briefly touching 1,300 for the first-time since early June 2008. MSCI's all-country world stock index rose 0.4 percent. Estimate-beating earnings from financial conglomerate ING and staffing firm Adecco, among other corporate results, gave fresh impetus to the largely stimulus-driven rally. U.S. government debt traded mixed. The benchmark 10-year U.S. Treasury note was up 6/32 in price to yield 2.64 percent, while the 30-year bond was down. Brent oil settled down 9 cents at $105.24 a barrel, while U.S. oil $1.52 to $94.89 per barrel. Data from the Energy Information Administration (EIA) showed U.S. gasoline stocks had fallen by 3.8 million barrels last week, compared with forecasts in a Reuters poll for a 300,000 barrel decline. Link this Share this Digg this Email Reprints

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