* Global stocks surge on G20 news, U.S. accounting rules
* Euro up vs dollar as ECB cuts rates less than expected
* Oil jumps above $52, G20 plans raise hope of turnaround
* Government debt slides on G20 hopes, bankl
(Recasts with U.S. markets, changes dateline, previous
LONDON)
By Herbert Lash
NEW YORK, April 2 (Reuters) - Global stocks rose sharply on
Thursday and the price of government debt fell on optimism over
efforts by world leaders meeting in London to solve the
economic crisis and a change in U.S. accounting rules that will
help troubled banks.
Oil prices surged more than 8.0 percent to above $52 a
barrel after world leaders at the G20 summit agreed to pump an
additional $1 trillion into the ailing global economy through
extra funding for groups like the International Monetary Fund.
For details see [].
The positive tone coming from the G20 summit raised the
risk appetite for many asset classes by raising hopes among
investors that a coordinated effort was underway to tackle the
worst economic downturn since the Great Depression.
U.S. government bonds extended losses as investors piled
into equities while euro zone government bonds slid after the
European Central Bank cut interest rates a less-than-expected
one-quarter percentage point to 1.25 percent.
The euro soared to nearly $1.35 after the ECB confounded
expectations for a deeper cut to 1.0 percent. But the euro
eased a bit after ECB President Jean-Claude Trichet refused to
rule out additional rate cuts in the future.
The G20 news and the change in FASB accounting rules more
than offset data which showed the number of U.S. workers filing
new claims for jobless benefits rose to the highest in more
than 26 years in the latest week. [].
Stock markets in Europe, on Wall Street and an index for
global stocks all rose more than 4.0 percent and an equities
index for emerging markets surged more than 6.0 percent.
Financial shares, a sector that led stocks deep into bear
territory but a key driver behind a recent equity rally, surged
on bets for an improving global economy and the easing of U.S.
accounting rules that have battered their balance sheets.
"Relaxing mark-to-market does give the banks a little more
flexibility that they can perhaps mark a few things up," said
Jack Ablin, chief investment officer at Harris Private Bank in
Chicago.
"It's also the symbolism of the G20 that there will be
coordinated efforts to stimulate the world economy."
The Dow Jones industrial average <> rose 306.80 points,
or 3.95 percent, at 8,068.40. The Standard & Poor's 500 Index
<.SPX> gained 33.77 points, or 4.16 percent, at 844.85. The
Nasdaq Composite Index <> climbed 70.96 points, or 4.57
percent, at 1,622.56.
The pan-European FTSEurofirst 300 <> index of top
shares surged 4.9 percent to 781.48 points, leaving the index
still down about 6 percent for the year.
"Generally there have been positive noises coming out of
the G20, and Trichet at lunch time was talking about the
likelihood of a recovery in 2010," said Jim Wood-Smith, head of
research at Williams de Broe.
The euro was strengthened after Trichet said officials had
yet to decide on "non-standard" policy measures and would offer
more details at the central bank's next policy meeting in May.
"The ECB is still concerned about preserving the integrity
of its currency," said Boris Schlossberg, head of FX research
at GFT Forex in New York. "They do not want to debase it in any
way, shape or form by doing radical unconventional measures."
The euro <EUR=> jumped 1.91 percent at $1.3484, while the
dollar was down against a basket of major currencies, with the
U.S. Dollar Index <.DXY> off 1.45 percent at 84.185.
Against the yen, the dollar <JPY=> rose 0.88 percent at
99.41.
U.S. government bonds extended losses.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
30/32 in price to yield 2.76 percent. The 2-year U.S. Treasury
note <US2YT=RR> fell 5/32 in price to yield 0.89 percent.
U.S. light sweet crude oil <CLc1> rose $4.02 to $52.41 a
barrel.
Gold accelerated losses after British Prime Minister Gordon
Brown said the G20 countries will ask the IMF to bring forward
gold sales to finance help for the poorest.[]
Spot gold prices <XAU=> fell $24.75 to $901.65 an ounce.
Overnight in Asia, stocks shot to a three-month on hopes
the U.S. downturn has bottomed.
Japan's Nikkei share average <> rose 4.4 percent while
the MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> firmed 5.8 percent after the G20 news.
(Reporting by Leah Schnurr, Steven C. Johnson, Pedro Nicolaci
da Costa and Frank Tang in New York and Joanne Frearson,
Christopher Johnson and Kirsten Donovan in London; writing by
Herbert Lash)
