GLOBAL MARKETS-Stocks extend rally, rating warnings hit euro

* Global stocks rise on mounting optimism about growth

* Euro falters against swiss franc

* U.S. Treasuries, dollar trim losses on GDP revision
(Rewrites throughout, updates with U.S. market open, changes
byline, dateline from previous LONDON)

By Alina Selyukh

NEW YORK, Dec 22 (BestGrowthStock) – World stocks advanced on
Wednesday on growing optimism about global economic growth
while the euro slumped to near-lifetime lows against the Swiss
franc after debt warnings on Portugal and Greece.

The price of oil topped $90 a barrel as a cold snap
prolonged severe disruptions in Europe.

Stocks have been on a tear so far this month as money
managers reallocated capital, anticipating improving economic
data and robust corporate earnings, according to a Reuters
poll. For details, see [ID:nLDE6BL0B2]

U.S. Treasury prices and the dollar edged up after data
showed U.S. third-quarter economic growth was a touch higher
than previously estimated, but consumer spending was softer.
For details, see [ID:nN21260995]

“The more recent data suggests we’re seeing reasonably
healthy retail sales growth, pretty healthy investment
spending, and some growth in employment. So maybe the core
growth or final sales growth is starting to accelerate in the
fourth quarter,” said Zach Pandl, economist at Nomura
Securities International in New York.

He called the report “a modest positive for the Treasury
market and a modest negative for risky assets.”

European shares hit a fresh 27-month high and U.S. equities
followed in kind, extending four days of gains that drove the
S&P 500 to levels not reached since before Lehman Brothers went
bankrupt two years ago.

With moves exagerated by thin pre-holiday trade, Europe’s
FTSEurofirst 300 index (.FTEU3: ) tacked on 0.3 percent to

The index was boosted by a 9.3 percent surge in ARM
Holdings (ARM.L: ), which supplies microprocessors to Microsoft
(MSFT.O: ). The software giant is developing a new version of its
operating system.

On Wall Street, the Dow Jones industrial average (.DJI: )
gained 3.63 points, or 0.03 percent, to 11,536.79. The Standard
& Poor’s 500 Index (.SPX: ) rose 1.93 points, or 0.15 percent, to
1,256.53, and the Nasdaq Composite Index (.IXIC: ) increased 0.79
points, or 0.03 percent, to 2,668.40.

Financial stocks continued to drive the U.S. rally after
lagging through the autumn. Bank of American Corp (BAC.N: ) rose
2.5 percent to $13.31, while JP Morgan Chase & Co (JPM.N: )
climbed 3.2 percent to $42.32.

Global stocks measured by the MSCI All-Country World Index
(.MIWD00000PUS: ) edged up 0.2 percent, nearing a 26-month high
hit last month.

The benchmark 10-year U.S. Treasury note (US10YT=RR: )
declined 3/32 points in price, yielding 3.3149 percent,

“Investors will be happy to see the market close off the
year with a decent gain,” said Richard Jeffrey chief
investment officer at Cazenove Capital Management. “There’s a
lot of macro information today that may influence people’s
thinking on 2011.”


Moody’s warning Tuesday that it may cut Portugal’s rating
and a Fitch statement that it may downgrade Greece reminded
investors that euro zone debt problems still flared and fueled
a euro selloff.

The single currency faltered to 1.2515 Swiss francs, near
its weakest level since launching in 1999. However, the euro
gained some respite against a broadly lower dollar on a
Portuguese newspaper report that China was ready to buy 4
billion to 5 billion euros worth of Portuguese sovereign debt.

Beijing offered no comment on the report, leaving investors
in the bond market unconvinced and sovereign bonds of smaller
European countries under pressure.

“There’s been no clarity on what European Union leaders
will do to deal with the debt crisis,” said Investec economist
Philip Shaw. “That uncertainty, coupled with the threat of
downgrades to various peripheral countries, has led to more
spread widening and a weaker euro.”

The euro (EUR=: ) nudged lower against the dollar, down 0.08
percent to $1.3085, while the dollar (.DXY: ) gained 0.04 percent
against a basket of major currencies. Versus the Japanese yen,
the dollar (JPY=: ) fell 0.32 percent to 83.46.

The credit rating warnings and weakening dollar helped
boost the appeal of gold as a safe-haven asset. Gold (XAU=: )
firmed to $1,386.50 an ounce, building on three straight
sessions of gains. The price was also underpinned after the
International Monetary Fund said it completed a massive gold
reserve sale that began a year ago. [ID:nN21131060]

Oil futures (CLc1: ) rose about 1 percent to $90.67 per
barrel, boosted by unusually cold weather in parts of the
northern hemisphere and after a trade group reported a large
decline in weekly crude stocks, surpassing expectations.
(Additional reporting by Naomi Tajitsu and Jan Harvey in
London, Karen Brettell, Edward Krudy and Wanfeng Zhou in New
York; editing by Jeffrey Benkoe)

GLOBAL MARKETS-Stocks extend rally, rating warnings hit euro