* European shares, bonds rebound for second day
* U.S. first-quarter final growth estimate cut to 1.8
* Dovish comments from ECB's Draghi weigh on euro
* Oil prices slide, bond prices gain
By Herbert Lash
NEW YORK, June 26 The dollar rose and global
equity markets gained for a second day in a row on Wednesday
after a surprisingly sharp downward revision to first-quarter
U.S. economic growth eased concerns that the Federal Reserve may
soon begin to withdraw stimulus.
Moves by China to calm bank fears and supportive signs from
European central bankers extended a rebound on Tuesday from last
week's global sell-off of stocks, commodities and bonds.
U.S. gross domestic product growth was reduced to a 1.8
percent annual rate from a prior 2.4 percent pace, the Commerce
Department said in its final estimate.
The equity rally put the S&P 500 on track for its biggest
two-day gain in three weeks, while European stocks gained close
to 2 percent after European Central Bank President Mario Draghi
said an accommodative monetary policy was still appropriate.
European shares also rose after Draghi's French colleague,
Benoit Coeure, said the ECB needed to make sure that the Fed's
plans do not hit euro zone bonds.
MSCI's all-country world equity index rose
0.77 percent, while the pan-European FTSEurofirst 300 index
of leading regional companies gained 1.7 percent. The
EuroSTOXX 50 index rose 2.2 percent.
"Despite all the rhetoric and fear about tapering, this will
keep the Fed firmly planted in stimulus, which is a positive for
the market," Michael Mullaney, chief investment officer at
Fiduciary Trust Co in Boston, which oversees more than $9.5
billion, said of the GDP revision.
"This is another example of bad news being good news," he
The Dow Jones industrial average was up 84.19 points,
or 0.57 percent, at 14,844.50. The Standard & Poor's 500 Index
was up 8.25 points, or 0.52 percent, at 1,596.28. The
Nasdaq Composite Index was up 20.11 points, or 0.60
percent, at 3,368.00.
The S&P 500 advance came on the back of a gain of nearly 1
percent on Tuesday, as U.S. data on durable goods orders, sales
of new homes and consumer confidence all topped expectations.
Gold and silver slumped to near three-year lows as investors
continued to dump assets which they have used as a safety net in
recent years in case central bank money printing fueled
inflation or backfired altogether.
Bond markets in Europe and benchmark U.S. Treasuries also
continued to claw back ground although investors remained wary
the rebound could give way with markets likely to need more time
to acclimatize to the new environment.
The benchmark 10-year U.S. Treasury note was up
18/32 in price to yield 2.5428 percent.
"Having seen an incredibly violent sell-off in the Treasury
markets that took everything with it, there is a certain amount
of settling back going on," said Kit Juckes, a market strategist
at Societe Generale in London.
Brent crude for August delivery fell 56 cents at
$100.70 a barrel. U.S. crude fell $1.01 to $94.30 a
The euro was down 0.74 percent at $1.2987. The dollar
rose to a three-week high of 82.80 against a basket of
currencies, buoyed mainly by solid gains against the