* Wall St mixed; hopes for banks' clean-up offset economic fears
* China exports tumble, weighing on dollar, world prospects
* Europe, Asian stocks end up as financials rise
By Walter Brandimarte
NEW YORK, March 11 (Reuters) - Hopes that the U.S.
government would speed up a plan to clean up bank balance
sheets supported U.S. and European stocks for the second day on
Wednesday, but sentiment remained fragile and trading was
volatile as bad economic news continued to make the headlines.
A plunge in China's February exports was the most
remarkable reminder of the magnitude of the global recession.
The news weighed on the dollar and on commodities, while an
overall cautious sentiment cushioned a fall in the prices of
safe-haven U.S. Treasuries.
"I don't know why people think you're going to get a
solution overnight when it took years to get into the problem,"
said Joe Saluzzi, co-manager of trading at Themis Trading in
Chatham, New Jersey. He was referring to expectations that the
U.S. Treasury would soon come up with a detailed plan to remove toxic
assets from banks' balance sheets.
Such expectations grew after U.S. Treasury Secretary
Timothy Geithner said last night he wanted to make it "compelling"
for banks to clean up their balance sheets.
Geithner also said he would quickly work out details for
financing bad asset sales. The Dow industrials were down slightly,
while the S&P inched up and the Nasdaq held a moderate gain at 13:57
p.m. (1757 GMT).
The Dow Jones industrial average <> was down 2.23 points, or
0.03 percent, at 6924.26, while the Standard & Poor's 500 Index
<.SPX> was up 0.58 of a point, or 0.08 percent, at 720.18. The Nasdaq
Composite Index <> gained 9.75 points, or 0.72 percent, to
1,368.03.
In Europe, the FTSEurofirst 300 index <> rose 1.76 points,
or 0.25 percent, to close at 692.65, supported by the financial
sector.
Despite Geithner's comments, the International Monetary
Fund said developed economies are moving too slowly in ridding
banks of their non-performing assets. []
In an interview with Reuters, the IMF's Managing Director
Dominique Strauss-Kahn warned that such a delay could
jeopardize a global economic recovery in 2010.
DOLLAR SLIPS AS CHINA'S EXPORTS DROP
Still, demand for stocks helped the U.S. dollar weaken against
major currencies, with the U.S. Dollar Index <.DXY> down 0.64
percent.
The euro <EUR=> was up 0.71 percent against the dollar, at
$1.2760. Against the Japanese yen, the dollar <JPY=> was down 1.07
percent at 97.63.
The greenback was also pressured by news that China's exports
slid 25.7 percent in February from a year earlier, sharply exceeding
the forecast for a 5.0 percent drop. []
The report cast doubts on China's ability to finance the
U.S. current account deficit in the long run, clouding the
prospects for the U.S. currency.
"The concern is that maybe China will not be able to
generate massive amounts of foreign exchange capital which can
then be recycled to U.S. Treasury securities," said Boris
Schlossberg, GFT's director of FX research. "That is the big
fear factor that hangs over the dollar."
Meanwhile, U.S. Treasury debt prices fell after a record large
sale of 10-year notes drew below-average demand. The benchmark
10-year U.S. Treasury note <US10YT=RR> was down 1/32, with the yield
at 3.016 percent, while 30-year U.S. Treasury bonds <US30YT=RR>
declined 18/32 to yield 3.761 percent.
The decline in Treasury debt prices was partially contained,
however, by lingering concerns about the state of the global
economy.
Investor caution also pressured commodity prices in general,
while keeping gold prices higher.
U.S. crude oil <CLc1> fell $1.21 to $44.50 per barrel. Spot gold
prices <XAU=> rose $13.00, or 1.45 percent, to $908.80. The
Reuters/Jefferies CRB Index <.CRB> of 19 commodity futures was down
1.97 points, or 0.95 percent, at 205.67.
(Additional reporting by Ellis Mnyandu, Gertrude
Chavez-Dreyfuss in New York; Editing by Jan Paschal)
