NEW YORK: Global stocks and the euro edged higher on Tuesday on hopes for a fresh injection ofpolitical support for Greece from Europe's top powers, though uncertainty continued to course through markets as Greece's debt crisis remained unresolved.
German Chancellor Angela Merkel sought to quash talk of an imminent Greek default but market confidence suffered another blow when Italy had to pay the highest yield since it joined the euro zone in 1999 to sell five-year bonds.
A Reuters report quoting a Greek government official as saying that Greek, German and French leaders would hold a conference call on Wednesday helped buoy the euro and underpin optimism in European equity markets.
"The market is still very much focused on the euro. We are back to watching headlines and it seems like there are more rumors than fact," said David Watt, senior currency strategist, at RBC Capital Markets in Toronto.
"In general, it's still a very cautious backdrop and it's hard to see a sustained back-up in the euro and even for that matter a sustained back-up in the European stock markets," he added.
MSCI's all-country world equity index rose 0.5 percent and the FTSEurofirst 300 index of top European shares gained 1 percent.
Stocks on Wall Street traded near break-even. "It really just feels like we are stuck in a range for the time being until we get some answers," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
The Dow Jones industrial average was down 22.63 points, or 0.20 percent, at 11,038.49. The Standard & Poor's 500 Index was up 1.49 points, or 0.13 percent, at 1,163.76. The Nasdaq Composite Index was up 9.77 points, or 0.39 percent, at 2,504.86.
Big-cap technology stocks Intel Corp, Oracle Corp,and Apple Inc led the Nasdaq higher.
U.S. Treasury prices fell ahead of a 10-year note auction while yields on benchmark German Bund set a historic low at 1.68 percent before paring gains as investors sought safety in government debt.
The benchmark 10-year U.S. Treasury note was down 10/32 in price to yield 1.98 percent.
Talk that Merkel and French President Nicolas Sarkozy would make a statement on Greece later in the day buoyed market sentiment but Sarkozy's office denied the speculation.
The euro rose 0.1 percent to $1.3671 against the U.S. dollar after earlier hitting a session low of $1.35578.
Against the yen, the euro fell to the day's lowest levels at 104.37 before moving back to 105.16, down about 0.3 percent,
Brent crude prices pared early gains and fell below $112 a barrel after the International Energy Agency cut its estimate for demand growth and raised its supply forecast. The IEA said Libyan crude oil production capacity would come back sooner than expected and there were signs that OPEC output was continuing to grow.
Brent was 55 cents lower at $111.70 a barrel. Gold prices rose in volatile trade after briefly extending the previous session's 2.5 percent slide below $1,800 an ounce.
Spot gold prices rose $8.29 to $1,821.50 an ounce.
German Chancellor Angela Merkel sought to quash talk of an imminent Greek default but market confidence suffered another blow when Italy had to pay the highest yield since it joined the euro zone in 1999 to sell five-year bonds.
A Reuters report quoting a Greek government official as saying that Greek, German and French leaders would hold a conference call on Wednesday helped buoy the euro and underpin optimism in European equity markets.
"The market is still very much focused on the euro. We are back to watching headlines and it seems like there are more rumors than fact," said David Watt, senior currency strategist, at RBC Capital Markets in Toronto.
"In general, it's still a very cautious backdrop and it's hard to see a sustained back-up in the euro and even for that matter a sustained back-up in the European stock markets," he added.
MSCI's all-country world equity index rose 0.5 percent and the FTSEurofirst 300 index of top European shares gained 1 percent.
Stocks on Wall Street traded near break-even. "It really just feels like we are stuck in a range for the time being until we get some answers," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
The Dow Jones industrial average was down 22.63 points, or 0.20 percent, at 11,038.49. The Standard & Poor's 500 Index was up 1.49 points, or 0.13 percent, at 1,163.76. The Nasdaq Composite Index was up 9.77 points, or 0.39 percent, at 2,504.86.
Big-cap technology stocks Intel Corp, Oracle Corp,and Apple Inc led the Nasdaq higher.
U.S. Treasury prices fell ahead of a 10-year note auction while yields on benchmark German Bund set a historic low at 1.68 percent before paring gains as investors sought safety in government debt.
The benchmark 10-year U.S. Treasury note was down 10/32 in price to yield 1.98 percent.
Talk that Merkel and French President Nicolas Sarkozy would make a statement on Greece later in the day buoyed market sentiment but Sarkozy's office denied the speculation.
The euro rose 0.1 percent to $1.3671 against the U.S. dollar after earlier hitting a session low of $1.35578.
Against the yen, the euro fell to the day's lowest levels at 104.37 before moving back to 105.16, down about 0.3 percent,
Brent crude prices pared early gains and fell below $112 a barrel after the International Energy Agency cut its estimate for demand growth and raised its supply forecast. The IEA said Libyan crude oil production capacity would come back sooner than expected and there were signs that OPEC output was continuing to grow.
Brent was 55 cents lower at $111.70 a barrel. Gold prices rose in volatile trade after briefly extending the previous session's 2.5 percent slide below $1,800 an ounce.
Spot gold prices rose $8.29 to $1,821.50 an ounce.
Rakesh Prasad
PGDM -3rd sem
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