* Solid Italy debt sale steadies markets after election
* Euro bounces off seven-week lows
* U.S. stocks open higher
By Caroline Valetkevitch
NEW YORK, Feb 27 Global stock indexes rose on
Wednesday as Federal Reserve Chairman Ben Bernanke's defense a
day earlier of the U.S. central bank's asset-buying program
helped calm investors, while the euro edged up after solid
demand at an auction of Italian government debt.
U.S. stocks opened slightly higher, with investors focusing
on Bernanke's second day of testimony in Congress. Bernanke's
defense on Tuesday of the Fed's monetary stimulus eased worries
over a possible early retreat from its policy of bond purchases.
Some markets also were relieved as Italy sold all 6.5
billion euros of the 5- and 10-year bonds it offered investors
where it could have chosen to sell less, though it paid more
than half a point more interest than before its election. Two
days after the vote offered no party a majority, markets had
been concerned about the country's finances.
Investors fear the strength of the vote for anti-austerity
parties in Italy could weaken efforts to reform public finances
and labour laws and damage the euro zone's efforts to resolve
its three-year old debt crisis.
Italian bonds and those of other euro zone countries
suffering concern over their creditworthiness were helped by the
sale, with safe-haven German bonds falling before
The euro recovered from Tuesday's seven-week low and
the currency was last up 0.4 percent against the dollar at
The MSCI world equity index was up 0.3
percent, and the pan-European FTSEurofirst 300 index
rose 0.4 percent.
Lingering worries about the euro zone kept a lid on gains.
"I remain of the opinion that we've seen the highs in the
short-term and we're due a bit of a correction," Michael Hewson,
analyst at CMC Markets, said.
"Basically, Italy will not have a government of any shape or
form for the next two or three months, so really it's just a
question of being defensive, taking a little bit of risk off the
Italy and Spain's need to change the shape of their
economies, get growth going and debt down, have been at the
heart of the euro zone's troubles for over a year, but the fears
have eased substantially since the ECB said it would do whatever
was necessary to prevent a break up of the euro.
On Wall Street, the Dow Jones industrial average was
up 56.59 points, or 0.41 percent, at 13,956.72. The Standard &
Poor's 500 Index was up 6.48 points, or 0.43 percent, at
1,503.42. The Nasdaq Composite Index was up 10.93
points, or 0.35 percent, at 3,140.58.
Italian 10-year yields fell 7 basis points to
4.83 percent in the secondary market while German Bund futures
were 27 basis points up on the day at 145.09 after the sale.
Brent crude gained 33 cents to climb back above $113.04 a
barrel, marking a steady recovery from its Tuesday's
month low of $112.41.