NEW YORK: Upbeat earnings and outlooks from companies including chipmaker Intel lifted global stocks and fueled risk appetite on Wednesday, driving commodities higher and the Australian dollar to a post-float high.
Solid corporate earnings in the US and Europe bolstered optimism about the economy and offset concerns of sovereign debt problems on both sides of the Atlantic after Standard & Poor's on Monday downwardly revised its outlook for the United States' prized AAA credit rating.
"It seemed like the earnings season got off to a bit of a shaky start, but now companies are coming through with very strong results, by and large," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
"This really shows that corporations are delivering strong results and benefiting from the slow but steady economic improvement."
World equities measured by MSCI All-Country World Index advanced 2 percent, extending the previous session's 0.5 percent rise and further recovering from Monday's 1.6 percent loss.
Intel posted higher than expected sales and forecast quarterly revenues well above Wall Street's estimates, while the world's biggest cosmetics group, L'Oreal, and carmaker PSA Peugeot Citroen also came in with robust figures.
Major US stock indexes soared. The Dow Jones industrial average was up 184.90 points, or 1.51 percent, at 12,452.29. The Standard & Poor's 500 Index was up 18.16 points, or 1.38 percent, at 1,330.78. The Nasdaq Composite Index was up 55.91 points, or 2.04 percent, at 2,801.08.
Japan's Nikkei average rose 1.8 percent, snapping a three-day losing run, and the pan-European FTSEurofirst 300 rose 1.8 percent. Emerging market stocks climbed 2.4 percent. were cautious on US equities, keeping short positions on the S&P 500 and the Russell 2000, though they were net long on Japanese equities.
SPANISH BOND AUCTION
An increase in risk sentiment, along with a well-received bond auction from Spain boosted the euro to its highest in 15 months against the US dollar.
The euro rose 1.2 percent versus the dollar to $1.4515, pulling further away from this week's low of around $1.4155. Traders said stop-losses were triggered through last week's high of $1.4521 and on the break of $1.4530.
Yields on 10-year Spanish government bonds fell 3 basis points to 5.47 percent after Spain saw solid demand for 10- and 13-year bonds at an auction, though speculation of debt restructuring by Greece forced Madrid to pay higher yields than a month ago to attract investors.
"Investor focus is on the earnings season in the US and this is key in driving growth expectations and pushing stock markets higher. This keeps focus away from the euro zone periphery right now," said Manuel Oliveri, currency strategist at UBS in Zurich.
Higher-yielding currencies such as the Australian dollar rose 1.5 percent at $1.0678 after hitting a post-float high of $1.0692.
Against a basket of currencies, the US dollar fell 0.7 percent to 74.370.
The soft dollar boosted commodities, with copper up 2 percent and Brent crude 1.1 percent to above $122 a barrel, recovering from a 1.7 percent drop in the previous two sessions.
Gold breached $1,500 an ounce for the first time and silver hit a 31-year high. Concerns about government debt problems, inflation and turmoil in the Middle East also helped boost gold prices.
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