NEW YORK (Reuters) - Global stocks rose on Friday, posting gains for a sixth straight week, and the euro firmed after sources said euro zone leaders agreed to terms of a possible emergency loan for Greece and U.S. economic data buoyed recovery hopes.
Greece would pay more than 6 percent to get emergency euro zone loans for up to three years, and even more if the loan’s terms were longer, euro zone sources told Reuters.
Hopes that an agreement on loan terms would help Greece manage its fiscal problems sparked a rally that lifted the euro to just shy of $1.35, its highest since Monday, and pushed European equities up more than 1 percent.
On Wall Street, the Dow industrials touched the psychologically important level of 11,000 for the first time since September 2008, just minutes before markets closed, though the blue chip index finished slightly below that mark.
Currency traders said the longer-term outlook for the euro remained negative and U.S. Treasury prices edged higher in late trade as persistent concerns about Greece fueled a safe-haven bid for lower-risk government debt.
“Given all the uncertainties with the euro zone, no one wants to be short Treasuries ahead of the weekend,” said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York.
Greek bonds outperformed German Bunds even as a Fitch downgrade of Greek debt to one notch above junk status failed to undermine investors’ optimism after the sources confirmed speculation of a emergency loan accord.
Billionaire financier George Soros told Reuters that the Greek debt crisis was solvable if Germany agreed that any emerging lending would be made with concessionary interest rates, as suggested by the standard IMF bailouts.
But Firas Askari, head of FX trading at BMO Capital Markets in Toronto, said any rescue of Greece is probably a poor one.
“By inviting the IMF to the party, one has to wonder what the purpose of the European Union is,” Askari said. “So I think any rally in the euro is probably short-lived.”
Global equities measured by MSCI's All-Country World Index .MIWD00000PUS rose 1.1 percent, snapping two days of losses.
U.S. shares rose after an upbeat Chevron outlook, while data that showed U.S. wholesale inventories rose more than expected in February and sales by wholesalers reached their highest level in 16 months brightened the economic and earnings outlook.
“Economic data so far in April has been fairly encouraging,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut, adding that investors want to know if the economy is producing sustainable growth.
The Dow Jones industrial average .DJI closed up 70.28 points, or 0.64 percent, at 10,997.35. The Standard & Poor's 500 Index .SPX gained 7.93 points, or 0.67 percent, at 1,194.37. The Nasdaq Composite Index .IXIC rose 17.24 points, or 0.71 percent, at 2,454.05.
The dollar was down against a basket of major currencies, with the U.S. Dollar Index .DXY down 0.77 percent at 81.906.
Against the yen, the dollar was down 0.24 percent at 93.16.
Gold rose to the highest level this year as the Fitch downgrade of Greece’s debt revived fears over the euro zone’s financial stability and prompted a flight to safety.
Spot gold peaked at a four-month high at $1,164.35 an ounce, the firmest since December 8.
June gold futures settled up $9 at $1,161.90 an ounce on the COMEX division of the New York Mercantile Exchange.
The benchmark 10-year U.S. Treasury note was up 1/32 in price to yield 3.88 percent.
Oil prices fell for a third day and retreated further from 18-month highs as bloated inventories stoked concerns about weak demand and technical signals sparked a sell-off.
The downturn erased early gains fueled by economic optimism and a weaker dollar.
Front-month U.S. crude fell 47 cents to settle at $84.92 a barrel, posting a tiny 5 cent gain on the week and finishing higher for the second straight week.
In London, ICE Brent crude closed 2 cents up at $84.83, after two days of losses.
Reporting by Leah Schnurr, Steven C. Johnson, Richard Leong and Gene Ramos in New York; Brian Gorman and William James in London; writing by Herbert Lash; Editing by Leslie Adler
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