GLOBAL MARKETS-Shares, dollar gain on solid start to U.S. earnings

Tue Jul 9, 2013 12:00pm EDT

* Shares rise after Alcoa's solid start to U.S. earnings
season
    * Greek aid deal initially lifts euro, euro zone debt
    * Oil eases as supply boosts outweigh Egypt worries


    By Herbert Lash
    NEW YORK, July 9 (Reuters) - Global equity markets extended
gains on Tuesday and the dollar traded near a three-year high,
spurred by an optimistic tone after a good start to the U.S.
earnings season and last week's strong U.S. June jobs data.
    Adding to the optimism, the pace of hiring by U.S. employers
increased in May, the Labor department said in a report that was
a positive sign for the American job market. 
    Equity markets reacted favorably to aluminum producer Alcoa
, traditionally the first major U.S. company to report
quarterly earnings. It posted adjusted profit and revenue above
expectations after markets closed on Monday. 
    Alcoa said it sees solid growth in global demand this year.
    "We've got a risk-on theme with Alcoa's better-than-expected
profits," said Jordan Hiscott, a trader at Gekko Global Markets.
"You are seeing people reallocating assets into equities; they
are definitely very popular at the moment." 
    The FTSEurofirst 300 index of leading European
companies hit its highest in a month before paring some gains as
a deal to provide Greece the latest 6.8 billion euro ($8.7
billion) installment of its bailout bolstered the upbeat mood.
 
    The broad regional index rose 0.84 percent to a provisional
close of 1,189.64. 
    MSCI's all-country world equity index rose
0.65 percent. 
    According to Thomson Reuters data through Tuesday morning,
analysts' expectations call for earnings of S&P 500 companies to
increase 2.9 percent in the second quarter from a year ago,
while revenue is forecast to have increased 1.5 percent in that
period. 
    Of the 23 companies in the S&P 500 that have reported
results, 65.2 percent have beaten analyst expectations, 21.7
percent reported earnings in line with expectations and 13.0
percent reported results that were below expectations. 
    "I would think that the trend is going to be up," said Jeff
Meyerson, head of trading for Sunrise Securities in New York.
"We could at any time have a substantial correction again, but I
think we still have a trend that's doing OK. That will be
determined by how the earnings come out in the next few weeks."
    The Dow Jones industrial average rose 60.56 points,
or 0.40 percent, at 15,285.25. The Standard & Poor's 500 Index
 was up 9.59 points, or 0.58 percent, at 1,650.05. The
Nasdaq Composite Index was up 15.68 points, or 0.45
percent, at 3,500.51. 
    Greece's aid deal helped Greek and Portuguese bonds
 add to their gains of the last few days. It also
helped lift the euro  off the seven-week low it has been
at since the European Central Bank made clear last week it is
prepared to cut interest rates again.
    The dollar rose toward recent three-year highs against a
basket of currencies, with more investors betting on further
gains as the Federal Reserve prepares to reduce its stimulus
program.
    The dollar's biggest gains were against the British pound,
after weaker-than-expected UK data drove sterling close to a
three-year low and highlighted the divergence between UK and
U.S. monetary policy. 
    The dollar index, which measures the greenback
against a currency basket, was up 0.59 percent at 84.692.
    The euro was down 0.8 percent at $1.2766. The single
currency earlier found some support after Greece secured aid
that will prevent it from defaulting in August. 
    But comments by European Central Bank policymaker Joerg
Asmussen weighted on the euro. 
    "Markets are not putting too much faith in central bank
verbal guidance," he said.
    U.S. Treasuries prices held steady as investors prepared to
make room for a $32 billion three-year note sale, the first part
of this week's $66 billion in coupon-bearing supply.
    The 10-year U.S. Treasury note was unchanged in
price to yield 2.6358 percent. 
    Brent crude oil fell toward $107 a barrel as worries about
supply disruptions in the Middle East eased, though investors
were wary that more negative headlines from Egypt could trigger
renewed volatility. 
    Brent fell 7 cents to $107.36 after slipping to a
session low of $106.85 earlier. U.S. crude rose 11 cents
to $103.25.