Shares climb on earnings; U.S. Treasuries fall
By Chuck Mikolajczak NEW YORK (Reuters) - Stocks in major markets drifted higher on Wednesday as investors took an optimistic view of the latest batch of U.S. corporate earnings, while U.S. Treasury prices declined after home sales data added to anticipation of a rate hike by the U.S. Federal Reserve later this year. Wall Street struggled to find its footing in morning trading as quarterly earnings continued their early trend of companies topping earnings estimates but falling short of revenue expectations. Equities slowly climbed in later trading to leave the benchmark S&P 500 index 0.55 percent below its intraday record set on Feb. 25. "People are seeing the negative effects of foreign exchange and that's not been drastically worse than expected," said Michael Sansoterra, portfolio manager of the RidgeWorth Large Cap Growth Fund in Atlanta. "They’re going back and looking at company fundamentals. Today you’re getting a bit of 'glass is half full.'" U.S. Treasury prices extended earlier declines after a stronger-than-anticipated 6.1 percent climb in domestic home resales in March increased expectations the Fed would hike interest rates later this year. In addition, a selloff in German Bunds caused investors to reduce their holdings in other low-risk government debt. The Dow Jones industrial average rose 88.68 points, or 0.49 percent, to 18,038.27, the S&P 500 gained 10.67 points, or 0.51 percent, to 2,107.96 and the Nasdaq Composite added 21.07 points, or 0.42 percent, to 5,035.17. Benchmark 10-year notes were last down 20/32 in price to yield 1.984 percent after touching a 3-1/2 week high yield of 1.993 percent. The 10-year German yield, close to falling to zero last week, was last at 0.163 percent, doubling in three sessions. European stocks pulled back from earlier highs to finish just below the unchanged mark, with a series of weak company earnings reports halting a two-day winning streak. Greece's debt crisis remained at the forefront of investors' minds. But a gathering of European finance ministers this week won't be the crunch meeting it had been billed as, giving Greek markets, euro zone bonds and the euro some breathing space. MSCI's all-country world index of equity performance in 46 countries advanced 0.28 percent, while the FTSEurofirst 300 index of top European shares dipped 0.02 percent at 1,628.35. Germany's DAX fell 0.6 percent. The Greek government's looming cash crunch initially weighed on local markets as Greek stocks hit a three-year low, but the benchmark Greek equity index managed to close 2.1 percent higher as euro zone and Greek officials said the country can muster enough cash to meet obligations into June. In commodities, Brent prices rose as conflict in Yemen remained a concern, while U.S. crude fell after another weekly rise in inventories despite slower production. Brent crude settled up 1.1 percent at $62.73 a barrel after tumbling more than 2 percent overnight, and U.S. crude futures settled down 0.8 percent at $56.16 a barrel. (Additional reporting by Noel Randewich; Editing by Meredith Mazzilli)
