(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, April 10 (Reuters) - U.S. stocks rose and oil
prices fell on Thursday from the prior day's record high as
investors took a shine to Wal-Mart's upbeat earnings outlook
and a higher profit forecast at tech bellwether Apple Inc.
The dollar reversed losses versus the euro after an earlier
surge to record highs by the euro zone's single currency, and
gold prices fell after a 10-day high early in the session.
Bond prices initially rose following government reports on
U.S. trade and jobless claims that reinforced the belief the
United States is slipping into recession and will spur the
Federal Reserve to trim benchmark interest rates further.
Wall Street's solid climb, after tepid performances earlier
in the week, somewhat offset losses in overseas stock
markets.
The rise in U.S. stocks, led by rally in technology shares
that lifted the Nasdaq 1.5 percent, turned bond prices on the
notion a U.S. slowdown will not be as deep as some have
expected.
A shallow recession, if it does occur, will prove positive
for corporate earnings and the stock market, analysts said.
"It's a reassessment in the values of rates and bonds
versus other risk assets, notably stocks," said George
Goncalves, chief agency, TIPS and Treasury strategist at Morgan
Stanley in New York.
At midday, the Dow Jones industrial average <> was up
94.29 points, or 0.75 percent, at 12,621.55. The Standard &
Poor's 500 Index <.SPX> added 9.86 points, or 0.73 percent, to
1,364.35. The Nasdaq Composite Index <> was up 34.80
points, or 1.50 percent, at 2,356.92.
U.S. government debt was lower. The benchmark 10-year U.S.
Treasury note <US10YT=RR> was down 13/32 to yield 3.528
percent. The 2-year U.S. Treasury note <US2YT=RR> was down 2/32
to yield 1.8026 percent. The 30-year U.S. Treasury bond
<US30YT=RR> was down 26/32 to yield at 4.3672 percent.
The dollar gained against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> up 0.46 percent
to 72.175. The euro <EUR=> was down 0.66 percent at $1.5725,
after rising to a record 1.5912 against the dollar. Against the
yen, the dollar <JPY=> was up 0.19 percent to 101.96.
Oil tumbled from record highs as top exporter Saudi Arabia
insisted markets were amply supplied despite falling U.S.
inventories and did not plan to change current output.
U.S. crude <CLc1> gave up $1.46 to $109.41 a barrel after
trading just 1 cent shy of a record $112.21 set on Wednesday.
London Brent crude <LCOc1> fell 98 cents to trade at
$107.49 a barrel, after hitting an all-time high of $109.98
earlier.
Stocks in Europe ended lower for a third straight session
but well off the day's lows, as strong gains on Wall Street
sparked a late recovery and eclipsed fears of more asset
write-downs in the European banking sector.
European stocks did not react much to the Bank of England
trimming interest rates and the European Central Bank holding
rates steady, as they came in as expected.
The ECB held interest rates at 4 percent and President
Jean-Claude Trichet, insisting on the need to continue to fight
inflation, warned that financial market tensions could last
longer and hurt the euro zone economy more than expected.
The BoE cut interest rates for the third time in five
months, by a quarter percentage point to 5 percent.
The FTSEurofirst 300 <> index of top European shares
closed 0.4 percent lower, at 1,303.53 points, after falling as
low as 1,286.14.
"The market is hanging on as a number of stocks that were
slaughtered are now recovering. Is it a new upward trend? We're
not quite sure at this point," said Valerie Plagnol, chief
strategist at CM-CIC Securities, in Paris.
Major Asian stock indexes dropped and the dollar remained
weak on concerns about the impact of the credit crisis on the
global economy and as record oil prices fuel inflation
worries.
The MSCI broad measure of Asian stocks outside Japan
<.MIAPJ0000PUS> edged up 0.5 percent, but is still down by
about 11 percent so far this year.
Japan's Nikkei average <> fell 1.3 percent. Stocks in
Australia <> dropped 1.2 percent and Singapore <.FTSTI>
eased 0.6 percent. Markets in Taiwan and South Korea also
fell.
Share markets in Shanghai <> and Hong Kong <>
posted small gains.
The yuan strengthened past 7 to the dollar for the first
time in more than a decade, marking China's growing economic
power and its increasing use of the currency in the fight
against inflation.
Spot gold prices <XAU=> fell $9.10, or 0.97 percent, to
$924.70.
(Reporting by Cal Mankowski, Lucia Mutikani and Richard Leong
in New York, Maryelle Demongeot in London and Blaise Robinson
in Paris; Editing by Dan Grebler)
