Global stocks rise on Spain bets and data, euro flat

NEW YORK Tue Oct 16, 2012 2:02am IST

1 of 6. Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New York October 5, 2012.

Credit: Reuters/Mike Segar

Stocks

   

NEW YORK (Reuters) - Global stocks rose on Monday on upbeat U.S. data and earnings and on bets Spain was close to asking for a bailout, but the lack of details on Madrid's next move kept the euro flat.

Data from China over the weekend showing a much higher-than-expected rate of growth in exports offered support to risk markets, but caution remained ahead of data due on Thursday expected to show the world's second-largest economy concluded a seventh straight quarter of slowing growth in September.

Following last week's decline, the largest in four months, U.S. stocks rose as Citigroup posted better-than-expected earnings and September retail sales signaled steady U.S. growth.

Citigroup (C.N) shares rallied 5.5 percent to close at $36.66, the highest in more than six months.

"After big declines last week we have strong Citi earnings and positive European news. In the short term it takes European stress out and allows markets to focus on earnings and the U.S. consumer," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

She said the sales data is encouraging as the retail-heavy fourth quarter gets under way. Data last month showed U.S. consumer confidence jumped to its highest in seven months in September.

The Dow Jones industrial average .DJI rose 95.38 points, or 0.72 percent, to 13,424.23. The S&P 500 .SPX gained 11.54 points, or 0.81 percent, to 1,440.13. The Nasdaq Composite .IXIC added 20.07 points, or 0.66 percent, to 3,064.18.

The S&P is less than 2 percent below its 2012 closing high hit a month ago.

An MSCI index of global shares .WORLD added 0.6 percent while the FTSEurofirst 300 index .FTEU3 of top European shares closed up 0.46 percent. U.S. dollar-denominated Nikkei futures rose 1.1 percent.

Spain could ask for financial aid from the euro zone next month and if it does, the request would likely be dealt with alongside a revised loan program for Greece and a bailout for Cyprus, euro zone officials said.

The euro surrendered early gains to trade little changed against the U.S. dollar as traders looked for clarity on the potential bailout for Spain.

Uncertainty over when Madrid will ask for financial aid and whether Greece can agree on new austerity measures with its lenders has discouraged some investors from buying the euro in recent weeks.

At the same time, expectations that the euro zone common currency will rally once Spain seeks a rescue package have kept market players from betting heavily against it.

The euro was trading up 0.02 percent at $1.2954.

Regardless of the uncertainty surrounding the deal, signs that Greece may get a fresh aid package prompted big gains in Greek debt. The benchmark Greek 10-year bond yield was down on the day at 17.55 percent, the lowest since August 2011.

The benchmark 10-year U.S. Treasury note was down 3/32, the yield at 1.6664 percent.

Demand for Greek bonds has been steadily improving as a result of recent comments from German officials, including Chancellor Angela Merkel, about the Athens government's efforts on economic reform. This has eased fears that Greece would ultimately be forced out of the euro zone.

Benchmark copper touched a one-month low on the London Metal Exchange on concerns about demand from China before bouncing back to trade flat on the day. Basic materials overall were posting losses, with the Thomson Reuters/Jefferies CRB commodities index .TRJCRB off 0.65 percent.

Brent futures jumped back from early losses to trade 1 percent higher at $115.77 per barrel after sliding 75 cents in the previous session. U.S. oil was trading off 11 cents at $91.75 after earlier falling more than 2 percent.

(Additional reporting by Nick Olivari; Editing by James Dalgleish and Dan Grebler)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared
Sensex surges nearly 400 points on energy reform, state elections

Sensex surges nearly 300 points on energy reforms, state elections

The BSE Sensex surges nearly 300 points and the Nifty gains 90 points after the government's energy reforms lead to a rally in energy firms, while wins by Prime Minister Narendra Modi's party in two state elections raise expectations for additional reforms.  Full Article 

REUTERS SHOWCASE

Indian State Media

Indian State Media

Controlling the message: Modi chooses state media  Full Article 

Asian Markets

Asian Markets

Japanese stocks lead sharp Asia rebound as U.S. data reassures   Full Article 

Gold Curbs

Gold Curbs

Finance Ministry wants to reimpose curbs on gold imports - ET  Full Article 

Eyeing Reebok

Eyeing Reebok

Investor group aims to buy Reebok unit - WSJ  Full Article 

Gold Lower

Gold Lower

Gold eases as dollar, equities recover on strong U.S. data  Full Article 

Health Check

Health Check

Credibility meets compromise in Europe's bank stress test.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage