GLOBAL MARKETS - Stocks bounce back from U.S. earnings let-down

A investor reacts in front of an electronic board showing stock information at a brokerage house in Taiyuan, Shanxi province October 12, 2009.

LONDON (Reuters) - World stocks kicked off the week in buoyant form on Monday and the dollar dipped against major currencies as investors recovered from some disappointing U.S. company earnings reports.

Wall Street looked set to open higher ahead of quarterly reports later on the day from Texas Instruments and Apple.

Oil hit a 12-month high above $79 a barrel before slipping back a bit, a move that boosted energy company shares.

MSCI's benchmark all-country world stock index was up 0.6 percent, not far from last week's 12-month high. Emerging market shares gained three-quarters of a percent.

Investors were rattled on Friday by disappointing results from General Electric and Bank of America.

But the general mood has been upbeat, raising expectations to the point where some positive results have actually disappointed.

Thomson Reuters Proprietary Research shows that with around a quarter of companies in the U.S. S&P 500 .SPX index having reported, 79 percent have beaten analysts' expectations.

In a typical quarter, the percentage is 61 percent.

"There is a positive attitude and again we are looking at more corporate results coming through. There are high expectations for Apple, the company has had a fantastic corporate story over the past few years," said Justin Urquhart Stewart, director at Seven Investment Management.

The pan-European FTSEurofirst 300 index was up more than 1.1 percent.

Earlier, Japan's Nikkei stock average fell 0.2 percent, but it pared the bulk of its losses in late trade and most other Asian share markets rose.

DANGLING DOLLAR

The euro edged up towards a 14-month high against the dollar, which remained under the selling pressure that has accompanied the global stock market rally.

It was dangling just below the psychologically key $1.50 level at $1.493.

"The trend clearly is for a weaker dollar due to a lack of interest rate support for the U.S. currency, the U.S. budget deficit and (because) of reserve bank diversification flows into other currencies, like the euro," said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich.

The dollar was down 0.2 percent against a basket of major currencies.

Euro zone government bond prices were weaker.

The 10-year Bund yield was down 3 basis points at 3.320 percent, within striking distance of a three-week high of 3.327 percent set last Friday.

(Additional reporting by Joanne Frearson and Naomi Tajitsu; editing by Patrick Graham)

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