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Stocks, oil rise on EU hope, China data.

Summary: NEW YORK - Global stocks hit a seven-week high on Monday and oil prices rose on optimism European leaders were moving closer to resolving the debt crisis and after Chinese data eased fears of an abrupt slowdown in the worldAiis second-largest economy.

NEW YORK - Global stocks hit a seven-week high on Monday and oil prices rose on optimism European leaders were moving closer to resolving the debt crisis and after Chinese data eased fears of an abrupt slowdown in the worldAiis second-largest economy.

The euro, however, slipped from a six-week high against the dollar, reversing early gains as investors remained worried about sharp differences over the size of haircuts private holders of Greek bonds will have to accept.

European Union leaders neared agreement over the weekend on bank recapitalization and on how to leverage their rescue fund to try to stop bond market contagion. But final decisions were deferred until a second summit on Wednesday. For details, see A E[c]ID:nL5E7LM0VDA E-

AiAThere is still a lot of hope that a solution out of Europe this time will last, and that is sending the market higher to break above trading ranges,AiA said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.

MSCIAiis all-country world stock index .MIWD00000PUS> last rose 1.1 percent, after hitting its highest level since early September. Emerging market shares .MSCIEF> rallied 2.8 percent.

European shares rose 0.5 percent. Earlier, JapanAiis Nikkei .N225> added 1.9 percent.

U.S. stocks gained in early trading after heavy equipment maker Caterpillar Inc reported a quarterly profit that topped estimates on record revenues. See A E[c]ID:nN1E79N091A E-

The Dow Jones industrial average .DJI> was up 44.73 points, or 0.38 percent, at 11,853.52. The Standard & PoorAiis 500 Index .SPX> was up 6.73 points, or 0.54 percent, at 1,244.98. The Nasdaq Composite Index .IXIC> was up 23.57 points, or 0.89 percent, at 2,661.03.

Brent above $110

Brent crude oil rose above $110 a barrel after solid Chinese manufacturing data boosted optimism about fuel consumption.

Brent crude was last up 74 cents at $110.30 a barrel, down from an intraday high at $110.94 a barrel. U.S. crude rose $1.24 to $88.64 a barrel, after reaching an intraday high of $88.90 a barrel.

The euro last traded 0.4 percent lower at $1.3846 in volatile trade.

The dollar fell against the yen, trading close to a record low hit on Friday and leaving traders on alert for possible renewed currency intervention to stem strength in the Japanese currency.

Finance Minister Jun Azumi said on Monday that Japan will take decisive action on excessive and speculative forex moves. He said that the dollar below 76 yen did not reflect economic fundamentals.

German government bond prices rose, with investors unconvinced plans on the table at a midweek European summit would be powerful enough to tackle the euro zone debt crisis.

AiAAll eyes are looking at WednesdayAiis possible answers. We are still not sure how the EFSF would work. This leaves a wide range of options open,AiA said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.

Longer-dated U.S. Treasuries prices also rose. The 30-year bond rose 14/32 to yield 3.24 percent, down 2 basis points from late Friday.

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Date:Oct 24, 2011
Words:586
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