GLOBAL MARKETS-Stocks climb on upbeat U.S. data; euro falls

Mon Apr 14, 2014 4:19pm EDT

* U.S. retail sales data indicates economy recovering
    * Results of Citigroup boost financial shares on Wall St
    * Renewed fears over Ukraine lift gold, oil prices
    * ECB's hints of more policy easing knock down euro

 (Updates with Wall Street closing levels)
    By Richard Leong
    NEW YORK, April 14 (Reuters) - Global equities rose on
Monday as robust U.S. retail sales data signaled economic
growth, while the euro fell after the European Central Bank gave
its strongest signal yet that it would ease policy to cool the
single currency.
    The encouraging retail sales from the world's biggest
economy, which had been bogged down by a harsh winter, overrode
fears of a military conflict in Ukraine that had punished stock
prices earlier. The upbeat news was a respite for the Standard &
Poor's and Nasdaq indexes, which had just suffered their worst
week since June 2012. 
    Ukraine's president threatened military action after
pro-Russian separatists occupying government buildings in the
east ignored an ultimatum to leave and another group of rebels
attacked a police headquarters in the region. The flare-up came
less than a month after Russia completed its annexation of
Ukraine's southern Crimea peninsula. 
    But the data showing that U.S. retail sales jumped 1.1
percent in March, the biggest monthly rise in 1-1/2 years, drew
investors back into riskier investments. 
    "This is the first report that activity is bouncing back
from the winter weather," said Craig Dismuke, chief economic
strategist at Vining Sparks in Memphis, Tennessee. "This should
set the foundation for stocks to go up a bit and bond yields to
go higher."
    On Wall Street, the Dow Jones industrial average 
closed up 146.42 points, or 0.91 percent, to 16,173.17, the S&P
500 gained 14.88 points, or 0.82 percent, to 1,830.57,
and the Nasdaq Composite added 22.96 points, or 0.57
percent, to 4,022.694.
    Financial stocks were among the largest gainers after Citi
 said its quarterly net profit rose as a smaller loss on
its troubled assets offset lower revenue and profit from its
core trading and lending businesses. Citi shares jumped 4.4
percent to $47.67. 
    Biotech shares remained volatile, ending flat in a
session that saw the group rise as much as 2.7 percent and fall
as much as 1.9 percent. The group entered bear market territory
- defined as a 20 percent drop from its peak - on Friday. 
    The MSCI world equity index, which tracks
shares in 45 nations, rose 0.3 percent to 405.26 points.
    The pan European FTSEurofirst 300 ended 0.5 percent
higher at 1,319.46. The index shed 2.9 percent last week. 
    Cyclical shares lagged broader indexes as the tension in
Ukraine and volatile global markets prompted investors to take a
more cautious stance and cash in on some of the best performers
of the past nine months
    The tensions over Ukraine took a toll on Russian shares
, which tumbled 1.3 percent, while the rouble fell 0.8
percent to its weakest level against the dollar in nearly
three weeks. 
    European Union foreign ministers agreed to widen sanctions
against Moscow, while the White House said it was seeking ways
to impose more "costs" on Russia. Renewed tension between Russia
and the West raised anxiety of imposing increasingly tough
measures that will inevitably harm both sides.  
 
    "The escalation sharply increases risks of an all-out civil
war in Ukraine," Bank of America Merrill Lynch analysts said in
a research note.  
    Earlier, Japan's Nikkei stock average ended down 0.4
percent at a six-month closing low. It plunged 7.3 percent last
week, the biggest weekly fall since the devastating earthquake
and tsunami in March 2011.
    The stabilization in stock prices led some traders to pare
their holdings in less risky U.S. and German government bonds.
    Benchmark 10-year Treasuries notes were 5/32
lower in price with a yield of 2.639 percent, and German Bund
futures fell 22 basis points to 143.86.  
             
  
    EURO FALLS
    More promises from the ECB over the weekend that it will
take action to head off further gains in the euro pulled the
euro back to $1.3821, down 0.45 percent from Friday's high of
$1.3905. Against the yen, the euro fell 0.3 percent to
140.65 yen, near the low end of its trading range
since early March.    
    "The strengthening of the exchange rate would require
further monetary policy accommodation," ECB head Mario Draghi
said at a weekend meeting of the International Monetary Fund.
 
    Benoit Coeure, another top ECB member, also laid out some
asset-buying options, a tactic which appears to be finally
gaining traction at the central bank. 
    The ECB "is taking the value of the euro more seriously in
their approach to monetary policy," said Thierry Albert Wizman,
global interest rates and currencies strategist at Macquarie Ltd
in New York.    
    The dollar gained against most major currencies on the
strong March retail sales report. It nudged up nearly 0.2
percent to 101.74 yen after touching a 3-1/2-week low of
101.32 yen on Friday, though that was far from the 2-1/2-month
high of 104.13 yen set on April 4.
    Among commodities, spot gold benefited from the move
toward safe-haven assets on the worries over Ukraine, adding 0.5
percent to $1,325.40 an ounce, after earlier marking a
three-week high. 
    Oil prices were also underpinned by fears that the tension
between Russia and Ukraine could escalate. Ukraine is a major
supply route for Russian gas to Europe. 
    Brent crude for May delivery settled up $1.74, or
1.62 percent, at $109.07 a barrel. U.S. crude settled up
31 cents, or 0.30 percent, at $104.05 per barrel. 

 (Additional reporting by Sam Forgione in New York, Marc Jones
and Marius Zaharia in London, Megan Davies in Moscow; Editing by
Leslie Adler)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.