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GLOBAL MARKETS-Stocks rally on earnings; gold at new high

Published 04/20/2011, 03:06 PM
Updated 04/20/2011, 03:12 PM
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* Stocks rise on upbeat U.S., European corporate earnings

* Australian dollar hits post-float high vs dollar

* Gold touches an all-time high above $1,500/ounce (Updates prices, adds details, comment)

By Wanfeng Zhou

NEW YORK, April 20 (Reuters) - 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.

Broad weakness in the U.S. dollar and a well-received bond auction from Spain helped push the euro to its highest in 15 months, while gold set new record highs above $1,500 an ounce.

Solid corporate earnings in the U.S. and Europe bolstered economic optimism and offset concerns of sovereign debt problems on both sides of the Atlantic that heightened after Standard & Poor's on Monday downwardly revised its outlook for the United States' prized AAA credit rating.

"It isn't just the good reports, but also the encouraging comments about how things look for the remainder of the year," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

"This is a testament to the strength of earnings we can expect to come out from here," added Luschini, who helps oversee $53 billion and owns Intel shares.

World equities, as measured by the MSCI All-Country World Index <.MIWD00000PUS> 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.

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Major U.S. stock indexes soared. The Dow Jones industrial average <.DJI> was up 172.79 points, or 1.41 percent, at 12,439.16. The Standard & Poor's 500 Index <.SPX> was up 15.88 points, or 1.21 percent, at 1,328.50. The Nasdaq Composite Index <.IXIC> was up 50.97 points, or 1.85 percent, at 2,795.87.

Japan's Nikkei average <.N225> ended up 1.76 percent, snapping a three-day losing run. The pan-European FTSEurofirst 300 <.FTEU3> rose 1.9 percent to close at a one-week high. Emerging market stocks <.MSCIEF> climbed 2.3 percent.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Asset returns in 2011:http://r.reuters.com/zub29r

Inflation-adjusted vs. nominal gold price:

http://r.reuters.com/ren88r

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Societe Generale, however, said in a note that hedge funds were cautious on U.S. equities, keeping short positions on the S&P 500 <.SPX> and the Russell 2000 <.RUT>, though they were net long on Japanese equities.

DEBT WORRIES

Yields on 10-year Spanish government bonds

The euro rose 1.3 percent versus the dollar to $1.4513

Renewed pressure on Greece to explore a debt restructuring has rattled peripheral debt markets in recent sessions, pushing Greek and Portuguese bond yields to new highs. [ID:nLDE73J0AT]

"All in all, relatively reassuring results providing no indication Spain's decoupling from the periphery is under immediate threat. That said, the risk of contagion has certainly not been taken off the table," said Richard McGuire, rate strategist at Rabobank.

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Higher-yielding currencies rose, with the Australian dollar

Against a basket of major currencies <.DXY>, the U.S. dollar fell 0.9 percent to 74.358.

The soft dollar boosted commodities, with copper up 2.5 percent and Brent crude up 2.5 percent to above $123 a barrel.

Gold

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