* China lending moves begin, MSCI world index down
* US stocks rise on strong results from Travelers, Apple
* S&P cuts Japan outlook on soaring debt
By Jennifer Ablan
NEW YORK, Jan 26 (Reuters) - U.S. stocks rose on Tuesday
following strong quarterly results from Travelers and Apple,
while the dollar and yen climbed against most of their major
counterparts as China implemented a clampdown on bank lending.
U.S. Treasury debt prices turned flat as stocks advanced,
paring earlier gains from China and President Barack Obama's
call for a freeze on federal spending on many domestic
programs.
China's central bank ordered banks that need to raise their
reserve ratios to implement the change on Tuesday, banking
sources said []. In recent weeks, China has moved
to cool bank lending to curb inflation and forestall asset
bubbles.
"Since China has started its banking proposals ... this has
generally been seen as a concern," said Justin Urquhart
Stewart, director at Seven Investment Management.
The dollar and yen climbed against higher-yielding
currencies on speculation China, the world's growth engine,
will take further steps to cool its economy, discouraging
demand for higher-yielding assets.
World stocks as measured by the MSCI world equity index
<.MIWD00000PUS> fell 0.23 percent with their emerging market
component <.MSCIEF> -- a sector particularly sensitive to China
-- down 2 percent. Emerging stocks, last year's star performer
with a nearly 75 percent gain, have lost more than five percent
so far this year.
Adding to China worries, Standard & Poor's cut its outlook
on Japan. The rating agency threatened to cut Japan's credit
rating unless it produced a credible plan to rein in soaring
debt and lift growth in an economy plagued by persistent
deflation. For more, please see [].
Japan's Nikkei closed down 1.8 percent. That was before S&P
cut its outlook.
US STOCKS UP ON EARNINGS
In stocks, the Dow Jones industrial average <> was up
65.07 points, or 0.64 percent, at 10,261.93, while the Standard
& Poor's 500 Index <.SPX> was up 4.60 points, or 0.42 percent,
at 1,101.38. The Nasdaq Composite Index <> was up 11.98
points, or 0.54 percent, at 2,222.78.
Shares of Travelers <TRV.N> led gains on the Dow after the
property-casualty insurer posted a profit that beat Wall
Street's estimate. The stock advanced 3.6 percent to $50.66.
For details see []
IPhone maker Apple Inc <AAPL.O> gained 3.5 percent to
$210.27, a day after reporting results. Apple was the top
positive on the Nasdaq, followed by Microsoft Corp <MSFT.O>,
which is scheduled to report later this week.
Firm demand for a $44 billion auction of 2-year notes was
offset by a higher than expected yield. That added to pressure
on Treasuries.
For its part, the benchmark 10-year U.S. Treasury note
<US10YT=RR> was up 1/32, with the yield at 3.6246 percent. But
the 2-year U.S. Treasury note <US2YT=RR> was down a touch at
1/32, with the yield at 0.8237 percent, while the 30-year U.S.
Treasury bond <US30YT=RR> was down 2/32, with the yield at
4.5538 percent.
In currencies, the dollar was up against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
up 0.25 percent at 78.384 from a previous session close of
78.190.
The euro <EUR=> was down 0.40 percent at $1.4094 from a
previous session close of $1.4150. Against the Japanese yen,
the dollar <JPY=> was down 0.79 percent at 89.52 from a
previous session close of 90.230.
In energy and commodities prices, U.S. light sweet crude oil
<CLc1> fell 52 cents, or 0.69 percent, to $74.74 per barrel,
while spot gold prices <XAU=> rose $1.10, or 0.10 percent, to
$1098.90. The Reuters/Jefferies CRB Index <.CRB> was down 2.10
points, or 0.76 percent, at 274.64.
(Additional reporting by Jeremy Gaunt and Richard Leong;
Editing by Andrew Hay)
