US earnings give stocks a boost

[April 20, 2011]  LONDON (AP) -- Strong earnings statements in the U.S. helped global stocks rebound further Wednesday after a warning over the U.S. credit rating earlier this week had rattled investors around the world.

A number of high-profile U.S. companies, such as investment bank Goldman Sachs Group Inc., chipmaker Intel Corp. and computer and consulting-services company IBM Corp. all delivered earnings that beat analysts' expectations.

That, alongside positive U.S. housing data, has helped stocks advance in the run-up to the Easter weekend, when many of the world's leading stock exchanges will be closed for four days.

There will be more earnings statements later from the likes of AT&T Corp., Apple Inc. and American Express Co.

"The reporting season continues to provide fuel for the fire," said Anthony Grech, head of research at IG Index.

In Europe, the FTSE 100 index of leading British shares was up 2.1 percent at 6,022 while Germany's DAX rose 2.5 percent to 7,213. The CAC-40 in France was 2.1 percent higher at 3,990.

Wall Street was poised for further solid gains following Tuesday's bounceback -- Dow futures were up 0.8 percent at 12,238 while the broader Standard & Poor's 500 futures rose 1.1 percent to 1,323.

On Monday, U.S. stocks posted their biggest one-day drop in over a month following a warning from Standard & Poor's that the U.S.'s credit rating had a one-in-three chance of being downgraded given the state of the public finances and worries that policymakers won't be able to come up with a credible deficit reduction plan.

That had consequences around the world, with indexes in Europe tracking Wall Street's decline. Asian markets retreated when they opened for business Tuesday before the earnings statements and the housing data helped calm the waters.

In the currency markets, the dollar has given up all the gains it made in the immediate aftermath of the S&P warning, when it benefited from its status as a safe haven and expectations that U.S. policymakers would rise to the debt challenge now that it was in the spotlight.

The dollar had also advanced against the euro early in the week by mounting concerns that the Greek government will have no option but to seek a way to lessen its debt burden -- a potential restructuring would have ramifications all round the eurozone as investors wonder whether Greece would be followed by others.

However, those fears were no longer weighing on the euro. By late morning London time, the currency was trading 1.2 percent higher, as investors' appetite for risk returned. When risk appetite is high, the euro often gains ground against the dollar.

"Despite rising peripheral bond yields and fears of a Greek debt restructuring the single currency continues to find dips fairly well sought after," said Michael Hewson, market analyst at CMC Markets.

Earlier in Asia, Japan's Nikkei 225 climbed 1.8 percent to close at 9,606.82 despite a government report showing that exports for March dropped for the first time in 16 months -- one of many consequences felt from the mammoth earthquake and tsunami that devastated the country's industrial northeast last month. The index is down more than 6 percent since the March 11 disaster.

South Korea's Kospi added 2.2 percent to 2,169.91, and Hong Kong's Hang Seng rose 1.6 percent to 23,896.10.

Australia's S&P/ASX 200 gained 1.4 percent to 4,859. Mainland China's Shanghai Composite Index rose 0.3 percent to 3,007.04. Benchmarks in Singapore, Taiwan and New Zealand also rose.

In the oil markets, prices remained elevated as the fighting in Libya continues. Benchmark crude for June delivery was up $1.39 to $109.67 a barrel in electronic trading on the New York Mercantile Exchange.

[Associated Press; By PAN PYLAS]

Pamela Sampson in Bangkok contributed to this report.

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