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CORRECTED - GLOBAL MARKETS-Stocks rise on economic data, euro up

Published 04/23/2010, 11:08 AM
Updated 04/23/2010, 11:17 AM
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(Corrects direction of euro in headline)

* Greece emergency aid package; earnings support stocks

* Cautious confidence over Greek package, euro wavers

* US durable goods, housing data point to rebound

By Al Yoon and Claire Milhench

NEW YORK/LONDON, April 23 (Reuters) - Global stocks and the euro rose on Friday as corporate profits in the United States and Europe underscored expectations for economic growth, while Greece's request for emergency aid gave only measured hope in the debt-ridden nation.

Wall Street shares rose as investors weighed strong earnings against the uncertainty of the impact of a Greek debt rescue. A surprising jump in U.S. sales of new homes underscored the strength of the economic rebound, supporting stocks.

Prime Minister George Papandreou's announcement that Athens activated the EU/IMF bailout package was largely factored in during morning trading. For more, please see: [ID:nATH005399]

Daragh Maher, deputy head of FX strategy at Credit Agricole CIB, said it was a positive development in the short term, but in the longer term little more than bandage.

"We aren't really much further into solving the problem," added Peter Chatwell, strategist at Credit Agricole CIB. "We need to know how much Greece will get and when, so uncertainty will continue to be a problem, hence no major (market) reaction since the formal announcement."

With liquidity in Greek bonds practically dried up and the yield on a two-year Greek paper soaring, market players had predicted that the debt-ridden country had little alternative to seeking financial aid. Two-year Greek yields, after topping 12 percent on Thursday, declined to about 10.5 percent on Friday. The yield started the year near 4 percent.

In U.S. trading, the Dow Jones industrial average <.DJI> gained 4.69 points, or 0.04 percent, to 11,138.98. The Standard & Poor's 500 Index <.SPX> shed 0.79 point, or 0.07 percent, to 1,207.88. The Nasdaq Composite Index <.IXIC> dropped 7.23 points, or 0.29 percent, to 2,511.84.

Indices added to gains after the U.S. Commerce Department said sales of newly built single-family homes rebounded to the highest level in eight months as buyers rushed into the market to take advantage of a homebuyer tax credit.

The FTSEurofirst 300 <.FTEU3> index of top European shares gained about 1 percent, rebounding from a three-week closing low on Thursday. World stocks as measured by MSCI <.MIWD00000PUS> rose 0.3 percent.

European shares were also boosted by a much better-than-expected German business sentiment survey from Munich-based think tank Ifo, which climbed to 101.6 from an upwardly revised 98.2 in March. [ID:nBEB004451]

Shares in Volvo soared over 11 percent after the world's No. 2 truck-maker's first-quarter profit beat expectations [nLDE63M04Y]. Ericsson rose 9 percent on strong margin growth. [ID:nLDE63M0PP].

The euro fell against the U.S. dollar for a seventh straight session as questions persisted about how a financial aid package for debt-stricken Greece would be implemented.

A rebound for the euro lost steam as analysts said tapping the aid mechanism, worth 45 billion euros, was not likely to solve Greece's longer-term problems in tackling its budget deficit. Investors also sought clarity and details on how the loan would be disbursed to Greece.

"The euro bounce is very limited because the activation itself lacked details," said Amelia Bourdeau, senior currency strategist at UBS in Stamford, Connecticut. "We don't know how long it's going to take for parliaments in Europe to ratify the process of giving Greece the money."

The euro rose 0.5 percent to 1.3362. Against the Japanese yen, the dollar rose 0.78 percent at 94.15 from a previous session close of 93.420, and the U.S. Dollar Index <.DXY> increased 0.08 percent to 81.634.

U.S. Treasury debt prices fell after a reports pointed to stronger economic growth. In addition to home sales, U.S. non-defense capital orders ex-aircraft -- a gauge of business investment -- grew in March.

Yields on benchmark 10-year Treasury notes rose 0.05 percentage point to 3.82 percent.

In energy and commodities trading, U.S. light sweet crude oil rose 29 cents, or 0.35 percent, to $83.99 per barrel, and spot gold prices rose $2.40, or 0.21 percent, to $1143.30.

(Additional reporting by Ian Chua, Simon Falush, Naomi Tajitsu, and Brian Gorman; Editing by Dan Grebler)

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