* Euro hits day's low after weak Portugal auction results
* U.S. debt prices gain ahead of Bernanke's testimony
* Oil dips, but above $77 after U.S. crude inventory build
* Investors await Bernanke for monetary policy view
(Adds close of European markets)
By Herbert Lash
NEW YORK, July 21 (Reuters) - Global stocks and the dollar
rose on Wednesday after Apple's robust profits raised hopes
the recovery remains intact, but Federal Reserve Chairman Ben
Bernanke's planned testimony in Congress unnerved investors.
Optimism that began late on Tuesday after Apple Inc
<AAPL.O> announced an unusually upbeat revenue forecast spread
later to Asia and Europe. A raft of U.S. earnings also beat
Wall Street's expectations, bolstering sentiment.
But U.S. stocks wavered as earnings enthusiasm was
tempered by caution ahead of Bernanke's semi-annual testimony
before the Senate Banking Committee.
Investors will be watching for any hint of whether the Fed
will ease monetary policy further now that the U.S. economic
recovery has slowed.
MSCI's all-country world equity index <.MIWD00000PUS>
pared gains to trade about 0.3 percent higher.
Tuesday's late rally on Wall Street was due in part to
speculation Bernanke would try to spur lending by eliminating
interest paid on excess bank reserves held at the Fed.
"Yesterday, the rumors were the rally was sparked ahead of
what Bernanke potentially might say. Now we've got some
apprehension here," said Ryan Detrick, senior technical
strategist at Schaeffer's Investment Research in Cincinnati.
"So there is the 'What is Bernanke going to say? Is he
going to try and keep the pedal to the metal in terms of
interest rates low, add a new wrinkle?'"
At midday, the Dow Jones industrial average <> was up
16.28 points, or 0.16 percent, at 10,246.24. The Standard &
Poor's 500 Index <.SPX> was up 1.10 points, or 0.10 percent,
at 1,084.58. But the Nasdaq Composite Index <> was down
just 0.95 of a point, or 0.04 percent, at 2,221.54.
The unease took some of the glow off results from Morgan
Stanley <MS.N>, BlackRock Inc <BLK.N>, Abbott Laboratories Inc
<ABT.N>, EMC Corp <EMC.N> and Coca-Cola Co <KO.N>, all of
which beat analysts' expectations for quarterly earnings.
European shares made significant gains for the first time
in more than a week, with banks rising after strong results
from U.S. financials and on optimism that stress tests will
boost the sector's outlook. []
The FTSEurofirst 300 <> index of top European shares
rose 1.1 percent to close at 1,017.88 points, after earlier
climbing more than 2 percent.
The euro fell against the dollar as tepid demand at a
Portuguese debt sale underscored fears about Europe's banks
days before the European Union was due to reveal which ones
need to raise more capital. []
The dollar softened against the yen, though, as markets
braced for Bernanke to reassure Congress that the U.S. central
bank has the tools to reinvigorate the slowing economy.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.38 percent at 83.058.
The euro <EUR=> was down 0.57 percent at $1.281. Against
the yen, the dollar <JPY=> was down 0.29 percent at 87.25.
"The euro is correcting lower as a result of the
Portuguese auction," said Michael Hewson, currency strategist
at CMC Markets. "It doesn't take much to sow seeds of doubt in
the euro."
U.S. crude oil <CLc1> slipped 27 cents to $77.31 a barrel
after weekly government data showed a surprising increase in
U.S. crude oil stockpiles after widespread predictions of a
drawdown. []
The U.S. Energy Information Administration said commercial
crude inventories rose 360,000 barrels in the week to July 16
to 353.46 million barrels, confounding an average forecast for
a fall of 1.4 million barrels.
London ICE Brent futures <LCOc1> slid 10 cents to $76.12.
Prices for U.S. government debt rose ahead of Bernanke's
testimony. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
up 2/32 in price to yield 2.95 percent.
Asian stocks rose on Apple's strong earnings and on hopes
that China may roll back policy tightening measures later this
year. The MSCI index of Asia Pacific ex-Japan stocks
<.MIAPJ0000PUS> rose 0.7 percent, Japan's Nikkei average
<> inched down 0.2 percent.
(Reporting by Chuck Mikolajczak, Steven C. Johnson and Emily
Flitter in New York and David Turner and Joe Brock in London;
Writing by Herbert Lash; Editing by Jan Paschal)
