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GLOBAL MARKETS-Euro slips on Irish ratings cut, stocks gain

Published 04/15/2011, 11:31 AM
Updated 04/15/2011, 11:36 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 rises on China growth, better US consumer sentiment

(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 slightly higher as tame U.S. inflation offset disappointing corporate earnings.

Oil prices gained, with North Sea Brent crude trading above $123 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]

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

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 .

But the dollar later pared its gains after data showed U.S. consumer sentiment improved in April.

Consumers grew more confident in the U.S. economy and even toned down their inflation expectations for the next five years, the Thomson Reuters/University of Michigan survey showed.

A mild rise in the core U.S. Consumer Price Index, which excludes food and energy, and the improved consumer confidence helped lift U.S. stocks.

The Labor Department said CPI increased 0.5 percent in March after rising by the same margin in February, in line with economists' expectations. Investors have been concerned higher energy and food costs would slow consumer spending. [ID:nOAT004787] [ID:nN15215700]

"People were revising their first-quarter growth outlooks lower because of headwinds in the quarter, but this data suggests that maybe the quarter wasn't so bad," said Tom Wirth, senior investment officer for Chemung Canal Trust Co, which manages $1.5 billion in Elmira, New York.

The Dow Jones industrial average <.DJI> was up 29.17 points, or 0.24 percent, at 12,314.32. The Standard & Poor's 500 Index <.SPX> was up 2.83 points, or 0.22 percent, at 1,317.35. The Nasdaq Composite Index <.IXIC> was down 4.17 points, or 0.15 percent, at 2,756.05.

Bank of America reported a steeper-than-expected decline in profits. Google unnerved investors with a large jump in first-quarter spending. [ID:nN15213078], [ID:nL3E7FF1CC]

European shares rose slightly on U.S. economic data, helping overcome concerns about the quickening pace of Chinese inflation and weaker-than-expected U.S. corporate results.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares rose about 0.3 percent.

Global stocks as measured by MSCI's all-country world index <.MIWD00000PUS> were flat.

Oil rose, lifted by U.S. consumer sentiment and Chinese economic growth data that outweighed concerns about the strain of rising fuel costs on the economy. [ID:nL3E7FF0HH]

ICE Brent crude for June delivery rose $1.50 at $123.50 a barrel. U.S. crude futures for May rose to $109.28 a barrel, up $1.17.

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; Editing by Andrew Hay)

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