SENSEX NIFTY
May 16, 2012, 10.07 PM IST | Source: Reuters

US stocks rise on data, euro turns on Greek hope

The euro pared losses and bond prices slid on Wednesday after comments by German Chancellor Angela Merkel bolstered hopes that Greece would remain in the euro zone, while U.S. stocks rose on encouraging U.S. economic data.

US stocks rise on data, euro turns on Greek hope

The euro pared losses and bond prices slid on Wednesday after comments by German Chancellor Angela Merkel bolstered hopes that Greece would remain in the euro zone, while U.S. stocks rose on encouraging US economic data.

US industrial production posted its fastest growth in over a year in April and a rebound in groundbreaking for new U.S. homes last month suggested a recovery in US housing was gaining some traction, bolstering US investor sentiment that has been heavily hit by news about Greece.

Industrial output grew 1.1 percent, the most since December 2010 and nearly twice the pace expected by analysts polled by Reuters. Housing starts increased 2.6 percent to a seasonally adjusted annual rate of 717,000 units, while March's starts were revised upward.

"Nice to see some turnaround. Ideally supply is getting more in line with demand, and low (interest) rates may be finally helping the turnaround," David Carter, chief investment officer at Lenox Wealth Advisors in New York, said about housing.

"However, this housing story is much smaller than news out of Greece and might get easily forgotten," Carter said.

Stocks on Wall Street opened higher, while equity markets in Europe pared much of an early sell-off.

The Dow Jones industrial average was up 38.52 points, or 0.30 percent, at 12,670.52. The Standard & Poor's 500 Index was up 6.00 points, or 0.45 percent, at 1,336.66. The Nasdaq Composite Index was up 10.66 points, or 0.37 percent, at 2,904.42.

The FTSEurofirst 300 index fell 0.2 percent to 997.22.

MSCI's global equity index was down 0.4 percent to 306.53.

Prices on German government Bund bond futures fell to a session low, while Spanish and Italian bond yields eased, with traders citing comments from Merkel reiterating that Germany wanted Greece to stay in the euro zone.

Bund futures fell to 143.11, and the benchmark 10-year U.S. Treasury note was down 11/32 in price to yield 1.81 percent.

Both Bunds and U.S. Treasuries have safe-haven appeal and their prices rise when investors become jittery.

The euro climbed to a session high against the dollar expectations that Germany and France will act together to keep Greece in the euro zone after Merkel met French President Francois Hollande on Tuesday.

The euro pared losses to trade near break-even at $1.2725. The dollar rose 0.2 percent to 81.359 , its highest in four months against a basket of currencies.

Oil prices slid, accentuated by a surprise build in U.S. crude inventories.

Brent crude was down 64 cents at $111.60 a barrel and U.S. oil was down $1.16 to $92.82 a barrel.

ADS BY GOOGLE

video of the day

Go for midcaps in cement space, bullish BPCL, IOC: HDFC Sec

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.