Stocks up on U.S. earnings; riskier currencies gain
NEW YORK (Reuters) - U.S. stocks headed for their biggest gain in a month and riskier currencies also rallied on Tuesday as encouraging U.S. corporate earnings and improved confidence in Spain's debt and Europe spurred investors to take on more risk.
Shares on Wall Street snapped a two-day decline, joining buoyant stock markets across the world, after forecast-beating results by some major U.S. companies.
A Spanish bond auction drew stronger demand than expected, and upbeat German sentiment data eased worries about the euro zone crisis, pushing European stocks higher. U.S. Treasuries prices fell on the renewed appetite for stocks and as the demand for the short-term Spanish debt tempered safe-haven moves.
Benchmark Brent oil in London closed higher, tracking other global markets, after trending lower early in the session.
The dollar and the yen, both low-yielding currencies, faltered as the renewed confidence drove investors to seek higher returns from riskier currencies such as the Canadian loonie and Australian dollar.
On Wall Street, the S&P 500 rose 1.6 percent, heading for its largest one-day gain since March 13.
The broader Dow .DJI rose almost as much after quarterly results from investment bank Goldman Sachs Group Inc (GS.N) and beverage giant Coca-Cola Co (KO.N) topped expectations. The tech-heavy Nasdaq .IXIC was lifted by a 4 percent rally in shares of consumer electronics icon Apple (AAPL.O).
"Earnings numbers have so far come in fairly positive and there was a lot of uncertainty regarding what those would look like," said Michael Yoshikami, CEO and founder at Destination Wealth Management in Walnut Creek, California.
German analyst and investor confidence rose unexpectedly in April to a high not seen since June 2010.
"The Germany survey combined with the announcement from Spain has helped (the market)," Yoshikami said.
Of the 39 companies in the S&P 500 index that have reported results through Tuesday morning, 74.4 percent topped analysts' expectations, according to Thomson Reuters data. This week, 86 S&P 500 companies are scheduled to report.
Yields on Spain's 10-year bonds dipped below 6 percent ahead of a longer-term Spanish government debt auction on Thursday. Spanish debt yields have jumped recently on concerns about the nation's fiscal stability in the latest flare-up of the euro zone debt crisis.
But some had doubts whether the market strength would last, as focus turned to Thursday's Spanish debt auction. Spain is seen as the potential new source of contagion in the euro zone debt crisis.
"We have a 10-year note auction on Thursday in Spain and that will be very important," said Wilmer Stith, a portfolio manager of Wilmington Trust Broad Market Bond Fund, part of Wilmington Trust Investment Advisors with about $15 billion in assets under management. "Spanish yields are below 6 percent which is somewhat encouraging going into Thursday's auction."
Half an hour before the close, the Dow Jones industrial average .DJI was up 201.85 points, or 1.56 percent, at 13,123.26. The Standard & Poor's 500 Index .SPX was up 22.54 points, or 1.65 percent, at 1,392.11. The Nasdaq Composite Index .IXIC was up 59.91 points, or 2.00 percent, at 3,048.31.
In Europe the FTSE Eurofirst .FTEU3 index of top European shares closed up 2 percent. The MSCI world equity index .MIWD00000PUS was up 1.4 percent.
The benchmark 10-year U.S. Treasury note was down 7/32, the yield at 2.0052 percent.
(Editing by Leslie Adler)
- Housing, jobs data weaken, but overall economic picture still upbeat
- Putin critic Khodorkovsky in Germany after pardon
- Investigators look overseas for hackers in Target case: source
- Pizza outlet attacked as India, U.S. fail to cool diplomat row |
- New York Mayor-elect's reputation for lateness parodied on Twitter
China landed an unmanned spacecraft on the moon, joining the United States and the former Soviet Union in the first such "soft-landing" since 1976. Slideshow