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New York - Global stocks gained and the euro
strengthened on Friday on growing optimism that Europe is on track to resolve
its festering sovereign debt crisis and after data showed a surprising surge in
U.S. retail sales.
Group of 20 finance ministers and central bank chiefs began two
days of talks in Paris on Friday. Although investors do not expect a
comprehensive strategy to Europe’s debt crisis to come out of the meetings, they
hope it will provide a basis for a draft plan in time for a European Union
summit on Oct. 23.
Government data that U.S. retail sales grew by 1.1% in
September, the fastest pace in seven months, boosted investor sentiment on the
economy and the data was expected to help lift economic growth forecasts.
The data, coupled with earnings from Google late Thursday that
trounced analysts’ expectations, led investors to shrug off a rating downgrade
on Spain by Standard & Poor’s and an unexpected slump in U.S. consumer
confidence in October.
“The data hasn’t mattered for a couple of months. It matters here
and there, but most of what today is, is Europe,” said John Canally, investment
strategist for LPL Financial in Boston.
“Just getting the details of this plan out there and making the
details work is the most important thing,” Canally said of the plan to contain
Europe’s debt crisis.
The benchmark S&P 500 was on track for back-to-back weekly
gains for the first time since early July, and gold headed toward its strongest
weekly rise in over a month.
Stocks on Wall Street pared some gains, rising less than 1%,
while shares in Europe closed up 0.8%.
The euro also eased, rising 0.6% to $1.3858.
The Dow Jones industrial average was up 70.39 points, or 0.61%, at 11,548.52. The Standard & Poor’s 500 Index was up 9.29 points,
or 0.77%, at 1,212.95. The Nasdaq Composite Index was up 18.86 points, or
0.72%, at 2,639.10.
Google shares jumped 5.8% to $591.38 after the Internet
search giant said robust growth at its mobile business and a strong emerging
market lifted its third quarter, allaying worries that a slowing Europe was
hurting business.
In Europe, the FTSEurofirst 300 index of top regional shares
provisionally closed up 0.8% at 974.46 points, while MSCI’s all-country
world equity index also gained 0.8%.
The increased appetite for risk on Friday also lifted the price of
crude oil more than 2.0% and pushed down the U.S. dollar and government
debt, which usually benefit when news is bearish.
“The outlook is good and getting better by the day. Risk is back
on,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi
UFJ in New York.
Brent crude rose above $114 a barrel, propelled by hopes that
European leaders would soon agree on how to curtail the long festering euro zone
debt crisis.
Early hints that China may loosen credit as inflation cools also
boosted gains while investors mostly ignored a preliminary reading of U.S.
consumer sentiment that sagged to 57.5 from 59.4 in September, a Thomson
Reuters/University of Michigan survey showed.
November Brent crude rose $3.18 to $114.29 a barrel on the day of
its expiry, while U.S. crude was up $2.34 at $86.57 a barrel.
U.S. Treasury debt prices fell.
The benchmark 10-year U.S. Treasury note was down 14/32 in price to
yield 2.23%.
Spot gold prices rose $7.79 to $1,673.90 an ounce.
