GLOBAL MARKETS-Shares boosted by M&A, German data; Yen climbs

Tue Feb 19, 2013 3:17pm EST

* Wall St gains on M&A optimism; S&P extends seven-week
winning streak
    * Google shares hit all-time high
    * European shares gain after strong German data
    * Yen rises broadly on doubts over monetary outlook


    By Angela Moon
    NEW YORK, Feb 19 (Reuters) - Global stock markets rose on
Tuesday as U.S. stocks were boosted by news of yet another
possible merger that suggested there is still room to the
upside, while a pick-up in German economic sentiment supported
European stocks.
    The S&P 500 Index, hovering near a five-year high,
extended its seven-week winning streak. The benchmark index is
already up 7 percent for the year.
    Office Depot Inc, the No. 2 U.S. office supply
retailer, and smaller rival OfficeMax Inc are said to be
in advanced talks to merge.
    The deal would be the latest addition to more than $158
billion in U.S. deals announced thus far in 2013. Last week,
deals were reached for the acquisition of H.J. Heinz Co 
by Berkshire Hathaway and a partner, and the sale by
General Electric of its remaining stake in NBCUniversal
to Comcast Corp.  
    In Europe, stocks posted their best finish in three weeks as
stronger-than-expected German sentiment data prompted investors
to return to economically-sensitive sectors like autos and
technology after a three-session losing streak.
    Optimism that the worst of the euro zone debt crisis is over
has helped German investor and analyst sentiment soar to its
highest level in nearly three years this month. 
    In the currency market, the yen climbed after two days of
losses. Japanese Finance Minister Taro Aso said he was not
considering foreign bond purchases. 
    Further boosting the U.S. market, Google shares 
rose 1.5 percent to an all-time high of $805.00.
    Office Depot rose 11 percent to $5.08 and OfficeMax shares
jumped 20 percent to $12.92. Shares of larger rival Staples Inc
 shot up 13 percent to $14.62. 
    "Equity investors have to be encouraged by M&A, since if the
number crunchers are offering large premiums, that shows how
much value is still in the market," said Mike Gibbs, co-head of
the equity advisory group at Raymond James in Memphis,
Tennessee.
    MSCI's world equity index was up 0.7
percent, though markets have been falling for two weeks since a
big run-up in January.
    The Dow Jones industrial average was up 47.56 points,
or 0.34 percent, at 14,029.32. The Standard & Poor's 500 Index 
 was up 9.40 points, or 0.62 percent, at 1,529.19. The
Nasdaq Composite Index  was up 16.05 points, or 0.50
percent, at 3,208.08.
    The pan-European FTSEurofirst 300 index 
provisionally closed up 1.1 percent at 1,171.73 - more than
recovering the previous three sessions' losses.
    
    YEN GAINS 
    The yen rose against the dollar and euro as disagreement
between Japanese officials raised doubts over how aggressively
Japan will ease its monetary policy.
    Japanese Finance Minister Taro Aso said on Tuesday he was
not considering buying foreign bonds as part of efforts to ease
monetary policy, a day after Prime Minister Shinzo Abe said this
was an option. 
    Expectations Japan will take further stimulative steps to
fight deflation have driven the dollar up 8 percent versus the
yen so far this year. But the pace of the yen's fall has slowed
lately as investors waited to see if words will translate into
action.
    "The comments suggested that there may be growing
differences between the prime minister and the finance minister,
which could threaten the pace of policy easing going forward,"
said Omer Esiner, chief market analyst at Commonwealth Foreign
Exchange in Washington, D.C.
    The dollar fell 0.6 percent to 93.36 yen, well below
a peak of 94.22 yen hit on Monday after Japan escaped direct
criticism from its G20 peers at the weekend.
    The euro was down 0.4 percent at 124.99 yen.
Against the dollar, the euro rose 0.3 percent to $1.3387.
    The euro moved further away from a three-week low of $1.3306
hit on Friday, with traders reporting bids at $1.3310-15.
    Europe's shared currency also rose sharply against sterling,
gaining 0.5 percent to 86.78 pence on speculation that
the UK could lose its triple-A credit rating. 
    The euro has come under selling pressure in the wake of
recent data revealing a deeper-than-forecast euro zone recession
and on concerns that Italy's Feb. 24-25 election could fragment
parliament, potentially hampering the country's reform efforts.
    The dollar index, meanwhile, slipped 0.2 percent to 80.451,
still within striking distance of the 80.727 six-week
high hit on Monday.
    U.S. Treasury debt was little changed. The benchmark 10-year
U.S. Treasury note was down 5/32, with the yield at
2.0225 percent.
    Brent crude for April delivery was down 3 cents at
$117.35 per barrel, while U.S. crude for March added 62
cents to $96.47 a barrel.