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GLOBAL MARKETS-Euro falls on Irish ratings cut, stocks steady

Published 04/15/2011, 09:55 AM
Updated 04/15/2011, 10:00 AM
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* Euro falls against US dollar after Moody's cuts Ireland

* U.S. Treasuries extend gains on benign U.S. CPI data

* Oil prices steady on China growth, Goldman note

(Adds opening of U.S. markets, byline, previous LONDON)

By Herbert Lash

NEW YORK, April 15 (Reuters) - The euro fell after Moody's cut Ireland's sovereign rating to just above 'junk' status on Friday while stocks on major markets traded little changed as benign U.S. inflation offset dissappointing corporate earnings.

Oil prices were steady, with North Sea Brent crude trading just above $122 a barrel, after data showed economic growth in China beat forecasts despite government efforts to cool the economy and curb inflation. For details see: [ID:nL3E7FF0HH]

But copper prices fell for a fifth day after China reported inflation at a 32-month high, spurring fears authorities could tighten monetary policy again. [ID:nLDE73E0MY]

The euro zone crisis weighed on investor sentiment again after Moody's cut Irish debt ratings to just above 'junk' status, helping the euro fall against the U.S. dollar. [ID:nN15211953] The euro was last at $1.4405 .

A mild rise in the core U.S. Consumer Price Index, which excludes food and energy, helped lift U.S. stocks at the open even as rising food and gasoline prices boosted consumer inflation as expected in March, a government report showed.

The Labor Department said CPI increased 0.5 percent after rising by the same margin in February, in line with economists' expectations.

The Dow Jones industrial average <.DJI> was up 6.50 points, or 0.05 percent, at 12,291.65. The Standard & Poor's 500 Index <.SPX> was up 1.24 points, or 0.09 percent, at 1,315.76. The Nasdaq Composite Index <.IXIC> was unchanged.

European shares rose slightly on the U.S. economic data, helping overcome concerns about a quickening pace of Chinese inflation and weaker-than-expected results at Bank of America [ID:nLDE73E16H]

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares rose about 0.2 percent.

Global stocks as measurecy by MSCI's all-country world index <.MIWD00000PUS> were down about 0.2 percent.

Oil prices were supported by worries over supply from the Middle East and North Africa, as fighting in Libya continued. But a Goldman Sachs recommendation of an underweight allocation to commodities on a three to six-month horizon tempered gains.

ICE Brent crude for June delivery rose 15 cents at $122.15 a barrel. U.S. crude futures for May fell to $107.66 a barrel, down 45 cents.

"The pace of Chinese growth points to further monetary tightening there, which could weigh on Chinese fuel demand in the future," said Carsten Fritsch, analyst at Commerzbank.

U.S. Treasuries extended early gains after government data showed underlying inflation pressures remained subdued in March. [ID:nN15306631]

The benchmark 10-year U.S. Treasury note was up 18/32 in price to yield 3.43 percent.

The Greek/German 10-year government bond yield spread widened sharply on Friday, with traders citing a Bloomberg report that Germany would back a Greek debt restructuring. [ID:nBAT006165] (Reporting by Ryan Vlastelica, Nick Olivari and Ellen Freilich in New York; Joanne Frearson and Christopher Johnson in London; Writing by Herbert Lash)

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