* Emerging markets turmoil eases, Russia pledges on ruble
* Gold, U.S. Treasuries fall after U.S. GDP report
* U.S., European stocks rebound
* Emerging markets equities pare losses
By Herbert Lash
NEW YORK, Jan 30 The dollar strengthened and
global equity markets rebounded on Thursday after data showed
the U.S. economy grew strongly in the last quarter of 2013, a
rate that suggests solid corporate earnings and continued solid
growth into the new year.
Turmoil in emerging markets eased, as the hard-hit Turkish
lira and South African rand rebounded. Russia's
central bank pledged unlimited foreign exchange interventions if
the ruble strays outside its target band.
"There was a general rebound in risk sentiment," said
Jeffrey Young, U.S. interest rate strategist at Nomura
Securities International in New York. "Some confidence grew back
with the emerging markets story no longer developing."
The ruble hit record lows against the euro early in the
session, while the rand slid to multi-year troughs before
rebounding. Moves earlier in the week by Turkey, South Africa
and India to staunch capital flight had failed.
Emerging market currencies have felt the heat since the U.S.
Federal Reserve said it would begin to trim its stimulus, a
program that has injected more than $3 trillion into the U.S.
economy and world markets since the onset of the financial
The U.S. Commerce Department reported that gross domestic
product grew at a 3.2 percent annual rate in the fourth quarter,
which combined with the 4.1 percent pace in the third quarter
resulted in the biggest half-year increase since 2003.
The GDP growth, which was in line with economists'
expectations, drove a turnaround in equity markets in Europe and
a broad rise in Wall Street stocks. The S&P 500 scored its
biggest gain in more than a month, and the Nasdaq composite
index gained more than 2 percent at one point, helped by strong
quarterly revenue growth at Facebook Inc.
Facebook shares rose 14.1 percent to finish at a record
closing high of $61.08.
The dollar was up 0.7 percent against a basket of six
major currencies, at 81.069, and the appeal of the greenback
revived against the safe-haven yen and Swiss franc.
"There's a lot of concern over what's happening overseas but
in the domestic (U.S.) market GDP was pretty strong," said Cam
Albright, director of asset allocation at Wilmington Trust
Investment Advisors in Wilmington, Delaware. "If you see growth
in the economy pointing to higher earnings growth, that will
give markets more confidence in the United States."
The Fed, as expected, said on Wednesday it will cut its
monthly bond purchases by another $10 billion in February, to
$65 billion, as policymakers see less need for stimulus.
"The end of QE is an indication the economy is getting
better, though I'm not sure the market has entirely transitioned
to that idea yet," Albright said.
The euro fell 0.81 percent against the dollar at
$1.3552, while against the yen the greenback was up 0.38
percent at 102.67 yen.
A measure of global equity markets, MSCI's all-country world
index, rebounded, rising 0.19 percent. MSCI's
emerging markets index, however, was slightly lower,
down 0.22 percent.
On Wall Street, the Dow Jones industrial average rose
109.82 points, or 0.7 percent, to 15,848.61. The S&P 500
gained 19.99 points, or 1.13 percent, to 1,794.19, and the
Nasdaq Composite added 71.691 points, or 1.77 percent,
In after-hours trade, shares of Google Inc jumped
4.4 percent to $1,186, after closing up 2.6 percent in regular
Nasdaq trade. Google reported quarterly revenue that beat Wall
Street targets after the market close.
In Europe the pan-regional FTSEurofirst 300 index
of leading companies closed up 0.3 percent at 1,294.26.
Gold fell more than 2 percent, on track for its biggest
one-day drop in more than a month, as the U.S. GDP data and the
Fed's decision to keep trimming its stimulus boosted the dollar
and led traders to cash in gains in the metal.
U.S. COMEX gold futures for February delivery
settled down $20 an ounce at $1,242.20.
Brent oil rose to just over $108 per barrel, and U.S. crude
reached its highest level in a month on bitter cold weather in
the United States, which has boosted heating oil demand.
Brent crude rose 10 cents to settle at $107.95 a
barrel. U.S. crude settled up 87 cents at $98.23.
The U.S. bond market retreated following Wednesday's rally,
but some of the money leaving equities found its way into the
developed world's government bond market.
German Bund futures rose 33 ticks to settle at
143.23, while German 10-year yields fell to their
lowest level in nearly six months before ending at 1.712
Benchmark 10-year Treasury notes were last down
5/32 in price to yield 2.6949 percent.