World markets higher on earnings, growth

[February 17, 2010]  LONDON (AP) -- World stocks rose Wednesday on upbeat corporate earnings reports and as worries about Greece's debt crisis eased.

Kraft Foods Inc. and apparel retailer Abercrombie & Fitch reported earnings that beat expectations on Tuesday, while drugmaker Merck & Co. and UK banking giant Barclays also reported soaring profits. France's BNP Paribas, the eurozone's largest bank, posted its fourth straight quarterly profit on Wednesday.

That helped drive Britain's FTSE 100 benchmark index up 0.7 percent to 5,278.14 and Germany's DAX 0.8 percent higher to 5,637.88. France's CAC-40 rose 1.2 percent to 3,714.15.

Asian indexes also rose, although markets in China and Taiwan were closed for the Lunar New Year holiday, while Wall Street was expected to edge up on the open. Dow industrials futures were up 28 points at 10,269.00 and Standard & poor's 500 futures were up 5 points at 1,098.20.

Financial stocks were in demand, with BNP Paribas leading the charge with a 2.8 percent gain after its earnings statement. Italy's Unicredit Spa was up 2.9 percent and Lloyds Banking Group was up 3.0 percent.

Signs of growth in the U.S., the world's largest economy, also helped sentiment, driving Wall Street higher overnight after a manufacturing index rose. Eyes will turn to other U.S. data, including housing starts, jobless claims and inflation, as well as minutes from the Federal Reserve's latest policy meeting.

The minutes will be scrutinized for signs that the central bank is getting to ready to undo its stimulus measures and eventually raise interest rates.

Looming over markets, however, remained Greece's debt crisis and the danger of contagion to other vulnerable countries in the region. Those fears eased somewhat Wednesday, helping the euro stabilize.

After promising support but providing no details of a bailout, the EU gave Greece a month to show results in its austerity plan to cut budget spending. It also wants details by Friday on its use of swaps to manage the size of its debt in past years.

"It will be interesting to see how dominant the Greece story remains now that the deadlines have been pushed to 16 March for a timeframe of action," said Daragh Maher, analyst at Calyon.

"This could see the story fade from radar screens and allow some of the 'Greece discount' to disappear from the euro as the market obsession moves onwards temporarily at least," he said.

Earlier in Asia, Japan's Nikkei 225 stock average jumped 272.58 points, or 2.7 percent, at 10,306.83 and Hong Kong's Hang Seng index climbed 265.32, or 1.3 percent, to 20,534.01.

South Korea's Kospi gained 26.38, or 1.7 percent, to 1,627.43 while Singapore added 1.3 percent and India 1.3 percent. Australia's benchmark advanced 2.1 percent.

In the U.S. on Tuesday, the Dow rose 169.67, or 1.7 percent, to 10,268.81. The Standard & Poor's 500 index rose 19.36, or 1.8 percent, to 1,094.87, while the Nasdaq composite index rose 30.66, or 1.4 percent, to 2,214.19.

Oil prices extended gains above $77 a barrel amid expectations a growing U.S. economy will fuel increased crude demand.

Benchmark crude for March delivery was up 28 cents at $77.29 in electronic trading on the New York Mercantile Exchange. The contract rose $2.88 to settle at $77.01 on Tuesday.

The dollar rose to 90.57 yen from 90.14 yen and the euro fell to $1.3743 from $1.3764 after rallying Tuesday.

[Associated Press; By CARLO PIOVANO]

AP writer Alex Kennedy in Singapore contributed to this report.

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