* ECB lending, German Ifo data bolster rate cut expectations
* European shares build on biggest jump in seven months
* Euro hits three-week lows vs dollar before rebound
* Durable goods data weighs on U.S. stocks
By Herbert Lash
NEW YORK, April 24 Global equity markets and
crude oil rose on Wednesday, drawing support from strong
corporate earnings and speculation of a European Central Bank
interest rate cut after weak German economic data.
Wall Street traded flat to lower after a report said U.S.
durable goods recorded their biggest drop in seven months in
March, which tempered enthusiasm over what has so far been a
relatively robust U.S. earnings season.
A gauge of planned business spending rose only modestly,
indicating a slowdown in U.S. economic activity, which also
weighed on U.S. equities.
But news from the Munich-based Ifo think tank that German
business sentiment in April fell for the second consecutive
month and was worse than the most pessimistic forecasts boosted
European equities while weighing on the euro.
The Ifo report added to the view that the ECB is closer to
lowering interest rates than at any time since it last cut them
in July 2012 and is likely to shave off a quarter-point at its
policy meeting next week.
"There is enthusiasm the ECB is poised to cut rates and that
simply means more liquidity and that is the underlying, basic
strong factor for stock markets around the globe," said Peter
Cardillo, chief market economist at Rockwell Global Capital in
Cardillo said earnings continue to surprise to the upside
for the most part, so enthusiasm for equities continues to grow.
Analysts see earnings growth of 3.1 percent this quarter, up
from expectations of 1.5 percent at the start of the month.
Of the 174 companies in the S&P 500 index that have reported
first-quarter results, 68.4 percent have beat analysts'
expectations, according to Thomson Reuters data through
Wednesday morning. Since 1994, 63 percent have surpassed
estimates on average, while the beat rate is 67 percent over the
past four quarters.
Global equity markets, as measured by MSCI's all-country
world equity index, rose 0.58 percent to 363.16.
On Wall Street, the Dow Jones industrial average was
down 21.66 points, or 0.15 percent, to 14,697.80. The Standard &
Poor's 500 Index gained 1.38 points, or 0.09 percent, to
1,580.16. The Nasdaq Composite Index gained 0.10 points,
or 0.00 percent, to 3,269.43.
European shares chalked up a fourth straight session of
gains. The FTSEurofirst 300 of top regional shares
closed up 0.7 percent at 1,191.82.
British insurer Standard Life and Portuguese retailer
Jeronimo Martins led gainers, surging 8.0 percent and
6.8 percent, respectively, after announcing strong first-quarter
numbers. Volume was three and five times their average for the
past 90 days.
Brent crude rose above $101 a barrel as U.S. stocks of
gasoline declined, but gains were checked by the prospect of
slower growth and fuel demand in major economies.
Brent futures were up $1.43 to $101.74 a barrel.
U.S. crude futures gained $2.06 to $91.24.
"It's an unusual situation in that bad economic news is good
news for markets because it implies more easing by the central
banks," said Olivier Jakob, analyst at Petromatrix in Zug,
The euro initially edged lower against the dollar but held
above a near three-week low as hopes that Italy can resolve its
political gridlock were trumped by the weak German data, which
fanned talk of an ECB rate cut.
The euro dropped to $1.2954, its lowest since April
5, before paring losses to trade slightly higher at $1.3015.
The benchmark 10-year U.S. Treasury note rose
3/32 in price to yield 1.6944 percent.