GLOBAL MARKETS-Shares gain after Bernanke comments, euro lower

Wed Jul 17, 2013 1:59pm EDT

* Bernanke flexible on timeline for stimulus program
    * European shares rebound after BoE minutes shock
    * Bank of America rises after strong profit growth
    * Euro falls 0.5 percent, gold and silver decline


    By Ryan Vlastelica
    NEW YORK, July 17 (Reuters) - Stock markets around the world
rose on Wednesday after Federal Reserve Chairman Ben Bernanke
said the timeline for the U.S. central bank ending its stimulus
program this year was not set in stone.
    European shares rebounded from early weakness that came
after minutes from a Bank of England meeting showed all
policymakers voted against extending the bank's bond purchase
program, which, like the Fed's, has been widely credited with
boosting equity gains this year.
    The Fed recently said it would begin scaling back its
accommodative policies later this year if economic growth meets
its targets. While Bernanke reiterated in testimony to Congress
on Wednesday that was still the case, he noted that asset
purchases "are by no means on a pre-set course."
    In a question-and-answer session with the House Financial
Services Committee, Bernanke said the Fed's intention "is to
keep monetary policy highly accommodative for the foreseeable
future" because of high unemployment and below-target inflation.
    The U.S. dollar index rose 0.1 percent against a
basket of currencies, while the euro fell 0.2 percent.
The benchmark 10-year U.S. Treasury note was up
10/32, with the yield at 2.4944 percent. 
    Yields on the 10-year have jumped since May, when Bernanke
hinted the Fed would slow its bond purchase program this year.
    "Nothing he said drastically changes the game, but markets
have become more comfortable with Fed policy," said Andres
Garcia-Amaya, global market strategist at J.P. Morgan Funds in
New York, adding the rise in interest rates could be enough to
push the Fed to extend its stimulus.
    The Dow Jones industrial average was up 7.41 points,
or 0.05 percent, at 15,459.26. The Standard & Poor's 500 Index
 was up 5.24 points, or 0.31 percent, at 1,681.50. The
Nasdaq Composite Index was up 9.93 points, or 0.28
percent, at 3,608.43.
    The MSCI International ACWI Price Index rose
0.4 percent.
    U.S. markets were also supported by Bank of America,
which rose 3.1 percent to $14.35 after posting a steep jump in
profits. 
    Yahoo Inc and St Jude Medical also rallied
after results, with Yahoo the S&P's top percentage gainer, up
8.9 percent.
    Analysts expect S&P 500 company earnings to have grown 3
percent in the second quarter, with revenue up 1.5 percent,
according to data from Thomson Reuters. Of the 36 S&P components
that reported results through Tuesday morning, 63.9 percent beat
analysts' expectations and 55.6 percent surpassed revenue
estimates.
    Other S&P 500 companies scheduled to report earnings on
Wednesday include American Express Co, eBay Inc
, IBM and Intel Corp.
    European shares recovered from the surprise news that there
were no calls for new UK stimulus at Mark Carney's first meeting
in charge at the Bank of England. 
    Carney and the bank's other eight policymakers voted
unanimously against more bond purchases, setting aside their
differences ahead of a soon-to-be-released review on giving
guidance about future interest rates.    
    "It's quite a surprise that nobody voted for more (BoE
stimulus)," said Deutsche Bank economist George Buckley,
referring to bond buying known as quantitative easing.
    "Now the question is, if they don't do anything on forward
guidance, do they then go back to reverting to QE? I suspect not
because the data has shown signs of recovering." 
    European shares rose 0.6 percent while German Bunds
 rose 0.1 percent to 143.85.
  
   
    GOLD SLIPS
    In commodity markets, gold fell 1.2 percent,
retreating from a 0.8 percent gain in Tuesday's session. Copper
 fell 1.4 percent to below $7,000 a ton, giving up the
previous session's 1.2 percent gain.
    Brent crude prices rose 0.3 percent and hovered near
a 3-1/2 month high.
    "Traders would be very cautious in taking fresh positions
given that they have been burnt on both sides, on the dovish
side as well as the hawkish side," said Ben Le Brun, an analyst
at OptionsXpress in Sydney.
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