Global stocks surge on Barclay’s results, euro jumps

By Herbert Lash

NEW YORK (BestGrowthStock) – Global stocks surged on Tuesday, lifted by upbeat results from British bank Barclay’s and strong New York State factory data, while the euro posted its biggest gain versus the dollar since late November on bets the currency had fallen too far over Greece’s financial woes.

U.S. and European equities rose about 1 percent, helping to rekindle risk appetite among investors.

The weak dollar pushed up commodity prices, with crude oil rising about 4 percent and gold hitting a two-week high, up almost 2 percent. Copper, a barometer for global industrial demand, jumped to its highest level in more than two weeks.

The euro’s gains were limited, however, as sentiment toward the single currency remained broadly negative because of doubts that Greece’s debt problems will be resolved quickly.

The euro advanced more than 1 percent against the dollar to hit a session high of $1.3775.

U.S. Treasuries fell slightly as the surge in stock prices dimmed the allure of safe-haven government bonds.

European shares rose for the sixth day in seven, with Barclays (BARC.L: ) leading banks higher on both sides of the Atlantic after it kicked off the British banking sector’s reporting season with forecast-beating results.

Barclays Plc (BARC.L: ) reported a near doubling of profits last year to 11.6 billion pounds ($18.20 billion).

Both European and U.S. commodity-related shares gained on the higher crude and metals prices, which got a boost after a gauge of manufacturing in February in New York State easily beat forecasts as inventories jumped.

“The cyclical tailwind is still intact, with good support from economic data, as well as from companies’ earnings,” said Tammo Greetfeld, equity strategist at UniCredit Group.

“But there is downside risk from how the Greek deficit problems evolve.”

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares rose 1 percent to end at 1,002.10 points, its highest close since Feb 3.

Shortly after midday, the Dow Jones industrial average(.DJI: ) was up 118.20 points, or 1.17 percent, at 10,217.34. The Standard & Poor’s 500 Index (.SPX: ) was up 13.76 points, or 1.28 percent, at 1,089.27. The Nasdaq Composite Index (.IXIC: ) was up 21.51 points, or 0.99 percent, at 2,205.04.

The day’s gains came after a three-day weekend, with the market closed on Monday for the U.S. Presidents Day holiday.

Financial stocks got an early boost from the Barclays results. Bank of America (BAC.N: ) jumped 3 percent to $14.89.

Chevron Corp (CVX.N: ) rose 2.4 percent to $72.70 on the higher oil prices.

Oil jumped almost $3 per barrel to $77, supported by growing tensions over sanctions against Iran, as well as by the weak dollar.

U.S. crude for March delivery touched a session high of $77.28 per barrel, before easing back to $76.94.

The benchmark Brent contract for April delivery was trading up $3.14 a barrel at $75.65.

U.S. Treasuries fell as the stronger outlook for stocks dimmed the allure of safe-haven government bonds.

The benchmark 10-year U.S. Treasury note was down 2/32 in price to yield 3.70 percent.

But in Europe risk aversion remained, as the spread of Greek government bond yields over core German Bunds widened. Increasingly tough European Union demands on Greece to tackle its budget deficit failed to win investors’ confidence.

EU finance ministers set a deadline of May 15 for Greece to take urgent measures to bring its budget deficit under control, in addition to a mid-March deadline for a review of its progress so far.

Against the yen, the dollar was up 0.27 percent at 90.22.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index (.DXY: ) down 0.85 percent at 79.653.

Gold prices rose as investors bought the metal to hedge against financial risk in the euro zone, and as the euro rose versus the dollar.

Spot gold prices rose $16.50 to $1,117.00 an ounce.

In Asia, Japan’s Nikkei average (.N225: ) put on 0.2 percent.

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(Reporting by Caroline Valetkevitch, Vivianne Rodrigues, Emily Flitter and Burton Frierson in New York; Joanne Frearson, William James and Brian Gorman in London; writing by Herbert Lash; Editing by Leslie Adler)

Global stocks surge on Barclay’s results, euro jumps