World shares, euro rise on Greek hopes, German data

NEW YORK Sat Nov 24, 2012 1:24am IST

Traders work on the floor of the New York Stock Exchange, November 20, 2012. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange, November 20, 2012.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - Global stocks and the euro gained on Friday on signs of progress in talks on releasing aid to Greece and after an influential German survey found business sentiment had improved in Europe's largest economy.

U.S. stocks rose for a fifth day, getting a lift from bellwether technology shares such as Intel (INTC.O) and Microsoft (MSFT.O), both up about 2 percent. An index of semiconductor stocks .SOX gained 1.8 percent, while the S&P information technology sector index rose 1.6 percent.

Trading on Wall Street ended early after markets were closed Thursday for the Thanksgiving holiday. With many investors still on holiday on Friday, volume was low. About 2.8 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the daily average for the year to date of 6.5 billion.

The light volume exacerbated moves, and shares of big-cap technology companies climbed as investors took advantage of the day's upward momentum to add to their positions.

"Anyone that was on the sidelines waiting for a pullback like the one we just had in some of the tech names, they're looking for any glimpse of strong price action for 'permission' to enter into those (stocks)," said Todd Salamone, director of research at Schaeffer's Investment Research in Cincinnati, Ohio

Microsoft helped lift the Nasdaq, gaining 2.8 percent to $27.70, while Apple Inc (AAPL.O) rose 1.7 percent to $571.50.

From mid-September to mid-November, the S&P tech sector shed about 13 percent as the broader market also dropped.

Research In Motion RIMM.O surged on optimism about its soon-to-be-launched BlackBerry 10 devices, which will vie against Apple's (AAPL.O) iPhone and Android-based smartphones. RIM was up 13.6 percent at $11.66.

Friday also marked the start of the holiday shopping season and gave investors a reason to scoop up retailers' shares on hopes that consumers will go out to spend en masse.

The Dow Jones industrial average was up 172.79 points, or 1.35 percent, at 13,009.68. The Standard & Poor's 500 Index was up 18.10 points, or 1.30 percent, at 1,409.13. The Nasdaq Composite Index was up 40.30 points, or 1.38 percent, at 2,966.85.

For the week, the Dow was up 3.3 percent, the S&P 500 rose 3.6 percent, and the Nasdaq gained 4 percent.

European shares posted their best weekly gain so far this year after rising for a fifth day on Friday. The FTSEurofirst-300 index of pan-European shares rose 0.6 percent to end at 1,110.45.

Germany's BASF (BASFn.DE) and Bayer (BAYGn.DE) led a rally in chemical stocks after a German business morale index surprised with its first increase in seven months, raising the prospect that Europe's largest economy can regain some momentum.

Also helping the market, confidence in the global economic outlook got a big boost from the HSBC flash Manufacturing Purchasing Managers Index for China, which pointed to an expansion in activity after seven consecutive quarters of slowdown.

The Chinese data followed a report on Wednesday showing U.S. manufacturing grew in November at its quickest pace in five months, indicating strong economic growth in the fourth quarter.

The euro rose as high as $1.2943 on Reuters data, breaking above resistance at $1.2910, its 55-day moving average. It was last trading at $1.2941, up 0.5 percent on the day.

Against the yen, the euro also hit a seven-month high of 106.73 yen and was last at 106.65 yen, up 0.4 percent.

MSCI's world equity index was up 1.1 percent on Friday at 329.92 points. Earlier, MSCI's broadest index of Asia Pacific shares outside Japan rose 0.7 percent for a weekly gain of 2.6 percent, also its best week for two months.

Optimism about a deal to help Greece, hopes that U.S. lawmakers can agree on a solution to avoid a fiscal crisis, and data showing an improving global economic outlook have driven a rally in riskier asset markets this week.

Greece said the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. But other sources involved in the talks cautioned that the funding gap was far bigger than Greece suggested.

"While we wouldn't want to understate the challenges of reaching agreement on Greece, news reports have described some of the remaining obstacles as technical and legal, and thus the hurdles to a deal do not seem insurmountable," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.

Euro-zone finance ministers, the IMF and the European Central Bank (ECB) failed earlier this week to agree on how to get the country's debt down to a sustainable level. They will make a third attempt at resolving the issue on Monday.

U.S. government debt prices mostly dipped on Friday in light post Thanksgiving holiday trading. Bonds' safe-haven allure faded as investors scooped up stocks.

The benchmark 10-year U.S. Treasury note was down 4/32, with the yield at 1.6917 percent.

GOLD AND OIL GAIN

In commodities, gold rose above $1,750 an ounce for the first time in more than a month on Friday, gaining 1.3 percent as dollar weakness and options-related buying triggered a technical breakout.

Oil rose above $111 a barrel on Friday as the better-than-expected German business sentiment data helped ease worries about demand in the euro-zone economies, boosting the euro against the dollar, while fresh protests broke out in Egypt and led to supply concerns.

Brent crude futures were up 85 cents at $111.40 a barrel at 1734 GMT. U.S. crude was up 92 cents at $88.32. The U.S. market, which was closed on Thursday for the Thanksgiving holiday, will not issue a formal settlement price until later Friday.

On Thursday, Israel began withdrawing its army, which had been poised to invade the Gaza Strip in pursuit of militants that had fired rockets into Israel.

Although the Gaza ceasefire is holding, violence has emerged in Egypt. In Cairo's Tahrir Square, thousands of people participated in demonstrations against President Mohamed Mursi. Police fired teargas into the crowd in an attempt to disburse it.

(Additional reporting by Leah Schnurr; Editing by Jan Paschal; and Peter Galloway)

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