* ECB mum on rate cut, euro rises
* Major U.S. stock indexes up 1 pct, Treasury yields higher
* U.S. jobless claims data boosts confidence in economy
* Emerging markets calm as risk appetite rises
By Steven C. Johnson
NEW YORK, Feb 6 The euro rose against the dollar
on Thursday after the European Central Bank gave no sign of an
imminent rate cut and better-than-expected U.S. economic data
helped lift global stocks.
Relative calm in vulnerable emerging markets such as Turkey
and South Africa also supported riskier assets and drew
investors away from safe-haven U.S. and German government bonds.
Major U.S. and European stock indexes rose more than 1 percent.
The ECB left its main interest rate at 0.25 percent Thursday
but the central bank's president, Mario Draghi, surprised
markets by not signaling a near-term rate cut during remarks to
reporters despite deflation worries in the 18-country euro zone.
Draghi's remarks sent the euro, which had lost ground to the
dollar immediately after the decision, to a one-week high of
$1.3619 and pushed up German bund yields.
The euro was last up 0.4 percent at $1.3590.
"While he reiterated that risks for the economy remain to
the downside and that inflation pressures are likely to remain
subdued, he has not taken any meaningful step closer to easing
monetary policy," said Omer Esiner, chief market strategist at
Commonwealth Foreign Exchange.
Strong corporate earnings reports boosted European stocks
by 1.5 percent, dulling disappointment over the ECB.
Wall Street was having its best day in a week, thanks in part to
data showing fewer Americans than expected filed for first-time
U.S. jobless claims "are still higher than where they were
six weeks ago but are still consistent with a decent job
market," said Craig Dismuke, chief economic strategist at Vining
Sparks in Memphis. "The underlying trend is still positive."
National U.S. employment data due on Friday is expected to
show the economy added 185,000 new jobs last month.
Smaller-than-expected job gains in December have raised concern
about the strength of the U.S. recovery, which sped up in late
The Dow Jones industrial average was up 171.17
points, or 1.11 percent, at 15,611.40. The Standard & Poor's 500
Index was up 20.34 points, or 1.16 percent, at 1,771.98.
The Nasdaq Composite Index was up 46.32 points, or 1.15
percent, at 4,057.87.
Uncertainty about the U.S. recovery has pushed the S&P down
more than 4 percent this year after it rose by 29.6 percent in
2013. That likely will not last, said Michael Cuggino, president
of Pacific Heights Asset Management, though investors should
probably expect less robust returns in 2014.
"If people expect returns like we've seen over the last few
years, they might be disappointed," he said. "But I expect
people to slowly migrate back toward equities."
The MSCI world equity index rose 1.2
percent, while the yield on the benchmark 10-year U.S. Treasury
note rose to 2.71 percent as investors took on more
risk. The 10-year yield hit a three-month low of 2.57 percent on
The banking sector was in the spotlight after Credit Suisse
missed expectations with a marginal uptick in
fourth-quarter net profit, and its shares were down more than 2
Relative calm in the capital-hungry emerging markets of
Turkey, South Africa and India also lifted developing stocks,
after a rout in recent weeks that had driven safe-haven bids to
U.S. Treasuries and the yen.
Emerging markets have been inflated in recent years by huge
amounts of cheap cash created by the U.S. Federal Reserve. With
the Fed now scaling back the program, that flow is reversing,
putting pressure on emerging currencies and asset markets.
Emerging stocks were up 1.2 percent after hitting
five-month lows earlier this week, while the Turkish lira
and South African rand held above recent troughs.
U.S. crude oil settled up 46 cents at $97.84 a
barrel. Brent crude rose 96 cents at $107.20.