Euro rises as Trichet reassures, U.S. stocks gain

By Jennifer Ablan

NEW YORK (BestGrowthStock) – The euro rose against the dollar on Thursday after the head of the European Central Bank said Greece was not in danger of defaulting of its debt, while U.S. equities shrugged off the worries about Greece as higher retail sales boosted optimism about the economy.

European shares, however, shed almost 1 percent to close at a more than one-week low as the worries about Greece continued to dog sentiment.

Remarks by the president of the European Central Bank, Jean-Claude Trichet, after a policy meeting where the ECB held rates steady, comforted jittery financial markets from Europe to New York amid growing concerns that a rescue plan for debt-stricken Greece would fall apart.

“I would say that taking all the information I have, a default is not an issue for Greece,” Trichet said. “We are responsible for 330 million people and for 100 percent of the GDP of the euro area. Greece represents 2.5 percent of the GDP of the euro area, but it is obviously an important issue.” For more see [ID:nFAE005676]

The euro was up 0.07 percent at $1.335, after earlier falling as low as $1.3282, according to Reuters data. The low was near its 2010 trough of $1.3267 set in March on electronic trading platform EBS, which was also its lowest since May last year.

Trichet’s comments “helped boost demand for the euro,” said Michael Malpede, an analyst at Easy Forex in Chicago. “It may have calmed some of the jitters … over the Greek debt situation,” he added, but “I don’t think Trichet’s comments changed anything.”

MSCI’s all-country world index of global equities (.MIWD00000PUS: ) was off 0.22 percent, while emerging market shares (.MSCIEF: ) were down 0.55 percent.

On Wall Street, however, stocks rose on surprisingly strong March retail sales. The early Easter holiday and an improving job market helped retailers beat Wall Street’s forecast.

An S&P retail index (.RLX: ) rose 1.33 percent.

Online merchant Amazon.com (AMZN.O: ) shot up 4.37 percent to $140.77, leading the S&P 500 higher. It was the third biggest percerntage jump in Amazon shares this year.

The Dow Jones industrial average (.DJI: ) was up 29.55 points, or 0.27 percent, at 10,927.07, while the Standard & Poor’s 500 Index (.SPX: ) was up 3.99 points, or 0.34 percent, at 1,186.44. The Nasdaq Composite Index (.IXIC: ) was up 5.65 points, or 0.23 percent, at 2,436.81.

The FTSEurofirst 300 index (.FTEU3: ) ended down 0.93 percent at 1,087.99 points.

Markets pounded Greek bonds and banking stocks, driving the debt-stricken euro zone member’s borrowing costs to new highs and pushing it closer to tapping a last resort EU/IMF safety net.

“It is now up to the Greek government to go publicly to the EU and IMF and ask for the cash and the support; the matter cannot be long delayed,” Chris Pryce, Fitch Ratings’ senior analyst for Greece, told Reuters in an interview.

In Asia, the Nikkei 225 Index (.N225: ) dropped 1.1 percent.

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U.S. Treasury debt prices were down as selling pressure on global equities ebbed.

The benchmark 10-year U.S. Treasury note was down 7/32, with the yield at 3.89 percent, while the two-year U.S. Treasury note was down 1/32, with the yield at 1.07 percent. The 30-year U.S. Treasury bond was down 3/32, with the yield at 4.75 percent.

Treasuries got a boost earlier on weak U.S. jobless claims data. The number of U.S. workers filing new claims for unemployment insurance rose unexpectedly last week, reflecting seasonal volatility, according to a government report on Thursday.

The dollar was up against a basket of major trading-partner currencies, with the U.S. Dollar Index (.DXY: ) up 0.12 percent at 81.537 from a previous session close of 81.443.

The euro was up 0.07 percent at $1.335 from a previous session close of $1.3340. Against the Japanese yen, the dollar was down 0.01 percent at 93.33 from a previous session close of 93.340.

Earlier, the ECB left euro zone interest rates at a record low of 1 percent.

In energy and commodities prices, U.S. light sweet crude oil fell 39 cents, or 0.45 percent, to $85.49 per barrel, while spot gold prices rose $2.35, or 0.20 percent, to $1149.80. The Reuters/Jefferies CRB Index (.CRB: ), meanwhile, was down 2.34 points, or 0.84 percent, at 275.25.

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(Additional reporting by Wanfeng Zhou; Editing by Leslie Adler)

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