GLOBAL MARKETS-World stocks rise on HSBC, crude oil eases
(Recasts with U.S. markets, adds byline; changes dateline; previous LONDON)
By Herbert Lash
NEW YORK, May 12 (Reuters) - World stocks rose on Monday after better-than-expected results at HSBC, Europe's largest bank, and U.S. bond insurer MBIA eased worries about the impact of a credit crisis and crude oil fell below $125 a barrel.
Optimism in equity markets was in contrast to U.S. Treasury debt prices, which rose after Chicago Federal Reserve President Charles Evans said U.S. consumers were "under a lot of stress," underscoring the fragile state of the world's biggest economy.
The dollar firmed against the euro and yen toward last week's two-month peak and gold prices fell. Record high oil prices may help gold, a traditional hedge against inflation, defy declining demand from jewelers and other physical buyers.
In the U.S. stock market, the Nasdaq gained more than 1 percent as investors snapped up big-cap technology shares on hopes the U.S. economy may not be in as bad shape as previously feared.
Major financial markets were calm after a strong earthquake jolted China's southwest province of Sichuan. Shanghai stocks fell around 1 percent before closing higher on the day, while the yuan CNY1MNDFOR= slipped in offshore non-deliverable forwards against the U.S. dollar.
HSBC's results added to a growing perception among investors that banks are making solid strides in cleaning up balance sheets that have been hit hard by the nine-month-old credit crisis. The worst of the financial turmoil may have passed.
"There are signs that the financial market crisis is easing. Financial institutions are starting to offload bad loans and recapitalize," said Christine Li, European economist at Moody's research arm Economy.com.
However, she added, "The worst of the crisis might be over, but the pain to the real economy and the corporate sector could still lie ahead."
The Dow Jones industrial average .DJI was up 92.00 points, or 0.72 percent, at 12,837.88. The Standard & Poor's 500 Index .SPX was up 8.99 points, or 0.65 percent, at 1,397.27. The Nasdaq Composite Index .IXIC was up 28.14 points, or 1.15 percent, at 2,473.66.
Shares of MBIA (MBI.N) rose 5.5 percent to $9.95 after the bond insurer said its new business volumes appear to be rising in the current quarter.
Shares of Research In Motion Ltd (RIM.TO)(RIMM.O) rose 6.4 percent to $141.19 on optimism about its new BlackBerry Bold smartphone.
In Europe shares rose in quiet trade on HSBC's (HSBA.L) results and on energy stocks, due to high crude oil prices.
The FTSEurofirst 300 .FTEU3 index of top European shares closed unofficially at 1,346.47 points, up 0.3 percent. Volumes in Europe were thin due to partial holidays in some countries.
HSBC climbed 1.9 percent. Among energy stocks, France's Total (TOTF.PA) rose 1.4 percent and British group BP (BP.L) was up 1.1 percent.
HSBC said its profit in the first quarter rose from a year ago as growth in Asia helped counter some $5 billion in hits from bad debts on U.S. home loans and asset write-downs.
HSBC said it was increasingly likely the U.S. economy will go into recession this year and a recovery in the U.S. housing market was unlikely until at least 2009, but its trading statement was more positive than those from many rivals battered by the credit crunch.
The dollar rose against the yen and Swiss franc as investors snapped up riskier assets such as stocks, encouraged by a dip in oil prices and HSBC's earnings.
The dollar fell against major trading-partner currencies, with the U.S. Dollar Index .DXY down 0.23 percent at 72.946.
But the dollar rose against the yen JPY= up 0.96 percent at 103.82, and fell against the euro EUR=, which was up 0.32 percent at $1.5531.
"With equities moving higher, we are having a little flow back into carry trades, which is helping euro/yen and propping the euro up against the dollar, in addition to sterling and the other high yielders," said Mark Meadows, senior currency strategist at Tempus Consulting in Washington.
U.S. Treasury debt prices were mixed.
The benchmark 10-year U.S. Treasury note US10YT=RR was up 4/32, with the yield at 3.7616 percent. The 2-year U.S. Treasury note US2YT=RR was down 2/32, with the yield at 2.2679 percent. The 30-year U.S. Treasury bond US30YT=RR was up 12/32, with the yield at 4.503 percent.
U.S. light sweet crude oil CLc1 fell $1.16, or 0.92 percent, to $124.80 per barrel.
Spot gold prices XAU= fell 60 cents, or 0.07 percent, to $883.30.
In Asia, shares in Tokyo .N225 closed 0.6 percent higher as exporters such as Canon Inc (7751.T) recovered as the yen retreated, easing a potential squeeze on profits.
Shares across the rest of Asia .MIAPJ0000PUS were up 0.5 percent. (Reporting by Caroline Valetkevitch, John Parry, Lucia Mutikani and Lewa Pardomuan in London, and Peter Starck in Frankfurt; Editing by Leslie Adler)
