NEW YORK: The euro rose on Tuesday, Jan 11 on speculation that euro-zone officials could raise the effective lending capacity of the bloc's rescue fund while a surge in oil prices pushed U.S. energy stocks higher.
Crude oil prices climbed above $91 a barrel as a key Alaskan pipeline remained shut and on colder weather, lifting shares of energy producers but limiting gains of transportation and consumer-related stocks.
The euro also got a lift from talk of increased Portuguese bond buying by the European Central Bank and Japan's pledge to buy about 20 percent of the bonds to be jointly issued later this month to raise funds to support euro-zone periphery countries.
The possibility of increasing the actual capacity of the European Financial Stability Facility (EFSF) to a full 440 billion euros, from around 250 billion, could be part of moves aimed at calming fears over the severity of the region's debt crisis.
But investors remained cautious ahead of a make-or-break debt auction in struggling Portugal on Wednesday.
The auction will signal whether the indebted country will be able to afford to raise funds in the debt market or be forced to take a bailout. Spain will follow suit on Thursday.
U.S. Treasury debt prices slipped on Tuesday ahead of re-opened 10- and 30-year bond sale this week. Gold rose for a second day on rising demand before China's Lunar New Year in early February, while thermal coal prices rose to a year high due to fresh flooding in Australia, a top global exporter.
Energy shares helped the Dow and the S&P 500 end a three-day losing streak even as investors worried that rising fuel costs will undercut economic growth.
The Dow Jones industrial average rose 34.43 points, or 0.30 percent, to end at 11,671.88. The Standard & Poor's 500 Index added 4.73 points, or 0.37 percent, to finish at 1,274.48. The Nasdaq Composite Index gained 9.03 points, or 0.33 percent, to close at 2,716.83.
The S&P Energy Index rose 1.6 percent, but transportation stocks and consumer names softened as a 2 percent rally in oil prices raises costs for other industries.
"There's a big feeling we're going to have $100 barrel oil pretty quickly," said Shawn Hackett, president of Hackett Advisors in Boynton Beach, Florida.
He said that is clearly bullish for the sector, but oil above $90 a barrel could "take disposable income away from the economy and could hurt demand."
"All the leading indicators are pointing towards a positive earnings season once again," said Lothar Mentel, chief investment officer at Octopus Investments in London, adding that markets could push higher "as long as the positive results are accompanied by half-decent outlooks."
Both Sears Holding Corp and Tiffany & Co raised their profit outlooks, citing strong sales.
Homebuilder Lennar Corp surged 7.1 percent to $20.24 after after posting a fourth-quarter profit sharply higher than expected.
The front-month futures contract for the Nikkei 225 stock index trading in Chicago rose 105 points to 10,585.
The pan-European FTSEurofirst 300 index of top shares rose 1.23 percent to 1,147.15, near its highest closing level since mid-September 2008.
World stocks as measured by MSCI advanced 0.53 percent, with the emerging markets index gaining 0.61 percent.
AUCTIONS COMING UP
The single currency was up 0.22 percent at $1.2970 by late afternoon in New York trade ahead of Portugal's sale on Wednesday of 1.25 billion euros of bonds. This auction is seen as a critical test as to whether the indebted country is able to raise funds in the debt market or be forced to take a bailout.
The premium that investors demand to hold bonds issued by Spain, Italy and Portugal, rather than low-risk German Bunds, reversed earlier widening, with traders citing the European Central Bank's bond buying.
Portugal's prime minister and finance minister said on Tuesday that Portugal has no plans to seek a bailout, and the government was doing everything possible to avoid doing so.
Italy and Spain are also due to tap the bond market on Thursday, in auctions that will also be closely watched for any sign of contagion.
The dollar slipped against a basket of major currencies, with the U.S. Dollar Index down 0.05 percent at 80.84.
U.S. government bonds fell as traders prepared for sales of re-opened 10- and 30-year Treasury debt securities, but the day's steepest losses were trimmed after a three-year note auction drew a strong bid.
The benchmark 10-year U.S. Treasury note fell 14/32, with the yield at 3.343 percent. The 2-year U.S. Treasury note dipped 1/32, with the yield at 0.602 percent. The 30-year U.S. Treasury bond dropped 13/32, with the yield at 4.491 percent.
The U.S. Treasury will sell $21 billion in re-opened 10-year notes on Wednesday, and $13 billion in re-opened 30-year bonds on Thursday.
U.S. light sweet crude oil shot up $1.86, or 2.08 percent, to settle at $91.11 per barrel, as the Trans Alaska Pipeline remained shut after a leak was discovered on Saturday, removing more than half a million barrels per day from U.S. markets and on strong winter demand for North Sea crude.
Spot gold prices rose $6.61, or 0.48 percent, to $1,381.10 an ounce as last week's price decline encouraged an improvement in consumer demand in China ahead of the Lunar New Year in early February, pushing premiums for gold bars to their highest in two years.
Fresh flooding in top global exporter Australia has added a further $10 to coal prices, driving thermal coal to a year high.
Prices for thermal coal, used for power generation and the second-biggest energy source after oil, have gained more than 40 percent in the past 12 months to over $140 a tonne because supply from every key exporter is capped.
LME benchmark copper jumped $189 or 2 percent to close at $9,510 a tonne, within reach of last week's record high of $9,754, as investors continued to price in stronger 2011 demand outlooks for top consumers China and the United States. - Reuters
Crude oil prices climbed above $91 a barrel as a key Alaskan pipeline remained shut and on colder weather, lifting shares of energy producers but limiting gains of transportation and consumer-related stocks.
The euro also got a lift from talk of increased Portuguese bond buying by the European Central Bank and Japan's pledge to buy about 20 percent of the bonds to be jointly issued later this month to raise funds to support euro-zone periphery countries.
The possibility of increasing the actual capacity of the European Financial Stability Facility (EFSF) to a full 440 billion euros, from around 250 billion, could be part of moves aimed at calming fears over the severity of the region's debt crisis.
But investors remained cautious ahead of a make-or-break debt auction in struggling Portugal on Wednesday.
The auction will signal whether the indebted country will be able to afford to raise funds in the debt market or be forced to take a bailout. Spain will follow suit on Thursday.
U.S. Treasury debt prices slipped on Tuesday ahead of re-opened 10- and 30-year bond sale this week. Gold rose for a second day on rising demand before China's Lunar New Year in early February, while thermal coal prices rose to a year high due to fresh flooding in Australia, a top global exporter.
Energy shares helped the Dow and the S&P 500 end a three-day losing streak even as investors worried that rising fuel costs will undercut economic growth.
The Dow Jones industrial average rose 34.43 points, or 0.30 percent, to end at 11,671.88. The Standard & Poor's 500 Index added 4.73 points, or 0.37 percent, to finish at 1,274.48. The Nasdaq Composite Index gained 9.03 points, or 0.33 percent, to close at 2,716.83.
The S&P Energy Index rose 1.6 percent, but transportation stocks and consumer names softened as a 2 percent rally in oil prices raises costs for other industries.
"There's a big feeling we're going to have $100 barrel oil pretty quickly," said Shawn Hackett, president of Hackett Advisors in Boynton Beach, Florida.
He said that is clearly bullish for the sector, but oil above $90 a barrel could "take disposable income away from the economy and could hurt demand."
"All the leading indicators are pointing towards a positive earnings season once again," said Lothar Mentel, chief investment officer at Octopus Investments in London, adding that markets could push higher "as long as the positive results are accompanied by half-decent outlooks."
Both Sears Holding Corp and Tiffany & Co raised their profit outlooks, citing strong sales.
Homebuilder Lennar Corp surged 7.1 percent to $20.24 after after posting a fourth-quarter profit sharply higher than expected.
The front-month futures contract for the Nikkei 225 stock index trading in Chicago rose 105 points to 10,585.
The pan-European FTSEurofirst 300 index of top shares rose 1.23 percent to 1,147.15, near its highest closing level since mid-September 2008.
World stocks as measured by MSCI advanced 0.53 percent, with the emerging markets index gaining 0.61 percent.
AUCTIONS COMING UP
The single currency was up 0.22 percent at $1.2970 by late afternoon in New York trade ahead of Portugal's sale on Wednesday of 1.25 billion euros of bonds. This auction is seen as a critical test as to whether the indebted country is able to raise funds in the debt market or be forced to take a bailout.
The premium that investors demand to hold bonds issued by Spain, Italy and Portugal, rather than low-risk German Bunds, reversed earlier widening, with traders citing the European Central Bank's bond buying.
Portugal's prime minister and finance minister said on Tuesday that Portugal has no plans to seek a bailout, and the government was doing everything possible to avoid doing so.
Italy and Spain are also due to tap the bond market on Thursday, in auctions that will also be closely watched for any sign of contagion.
The dollar slipped against a basket of major currencies, with the U.S. Dollar Index down 0.05 percent at 80.84.
U.S. government bonds fell as traders prepared for sales of re-opened 10- and 30-year Treasury debt securities, but the day's steepest losses were trimmed after a three-year note auction drew a strong bid.
The benchmark 10-year U.S. Treasury note fell 14/32, with the yield at 3.343 percent. The 2-year U.S. Treasury note dipped 1/32, with the yield at 0.602 percent. The 30-year U.S. Treasury bond dropped 13/32, with the yield at 4.491 percent.
The U.S. Treasury will sell $21 billion in re-opened 10-year notes on Wednesday, and $13 billion in re-opened 30-year bonds on Thursday.
U.S. light sweet crude oil shot up $1.86, or 2.08 percent, to settle at $91.11 per barrel, as the Trans Alaska Pipeline remained shut after a leak was discovered on Saturday, removing more than half a million barrels per day from U.S. markets and on strong winter demand for North Sea crude.
Spot gold prices rose $6.61, or 0.48 percent, to $1,381.10 an ounce as last week's price decline encouraged an improvement in consumer demand in China ahead of the Lunar New Year in early February, pushing premiums for gold bars to their highest in two years.
Fresh flooding in top global exporter Australia has added a further $10 to coal prices, driving thermal coal to a year high.
Prices for thermal coal, used for power generation and the second-biggest energy source after oil, have gained more than 40 percent in the past 12 months to over $140 a tonne because supply from every key exporter is capped.
LME benchmark copper jumped $189 or 2 percent to close at $9,510 a tonne, within reach of last week's record high of $9,754, as investors continued to price in stronger 2011 demand outlooks for top consumers China and the United States. - Reuters
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