(Updates with new record price of oil, adds more earnings)
By Natsuko Waki
LONDON, April 17 (Reuters) - World stocks rose to a one-week
high on Thursday after better-than-expected corporate earnings
announcements reassured investors that companies around the
world are holding up despite the credit crisis.
The dollar fell to match all-time lows against the euro
<EUR=> near $1.60 set on Wednesday, with weakness in the U.S.
currency helping to drive up oil prices to new record highs
above $115 a barrel.
Better-than-expected results from tech bellwethers Intel
<INTC.O> on Tuesday and IBM <IBM.N> on Wednesday added to a
recent list of positive surprises in first-quarter earnings,
feeding optimism that tighter lending and credit conditions are
not affecting the economy as much as many had feared.
Results from the banking sector -- the epicentre of the
eight-month-old credit crisis -- showed financial firms are
scrubbing their books clean to deal with problems.
"What the market is most sensitive to in this earnings cycle
is any hint, any sign that we're past the worst for the
financial sector. Even more so, the concern for the rest of the
market is the degree to which earnings are holding up," said
Bernard McAlinden, strategist at NCB Stockbrokers in Dublin.
The FTSEurofirst 300 index <> rose 0.2 percent while
MSCI main world equity index <.MIWD00000PUS> rose 0.3 percent to
a one-week high.
Late on Wednesday, EBay <EBAY.O> posted a forecast-topping
22 percent rise in quarterly net profit. Key firms reporting
their Q1 results later include Bank of New York Mellon <BK.N>,
Merrill Lynch <MER.N> and Pfizer <PFE.N>.
The dollar fell 0.1 percent to $1.5977 per euro <EUR=>.
"There's quite a lot of momentum behind the euro," said Paul
Robson, currency strategist at RBS Global Banking, adding that
he saw a break above $1.60 in the next week or so.
"The euro is probably one of the only safe ports in the
current credit-tightening storm, and that's been giving euro a
little bit of a boost."
LIBOR STORM
Daily fixing of interbank reference rates in London due just
before 1100 GMT <LIBOR> is set to attract attention as concerns
about the credibility of the rates are affecting some interest
rate markets.
The spread on two-year U.S. interest rate swaps widened
sharply on Wednesday to their widest level in about five weeks
as a result of these concerns.
In recent months, market participants have questioned the
validity of the LIBOR rates, at which banks offer to lend
unsecured funds to each other and which are used for setting
prices of a wide range of financial instruments.
Critics say LIBOR rates come from a small group of banks and
do not accurately reflect the rates at which banks are willing
to lend to each other, especially in times of stress. The
British Bankers Association said it had brought forward a review
of its setting process.
Since the credit crisis broke in August, a gap between LIBOR
rates and Overnight Index Swaps -- a short-term benchmark rate
for secured funds -- has widened to more than 100 basis points.
European credit spreads improved, with the iTraxx Crossover
index <ITCRS5EA=GFI> tightening 10 basis points to 496 bps.
Emerging sovereign spreads <11EMJ> were steady while
emerging stocks <.MSCIEF> were up 0.7 percent.
The June Bund future <FGBLM8> was steady on the day.
U.S. light crude <CLc1> had risen as high as $115.45 a
barrel. The dollar's weakness and a fall in U.S. gasoline
stockpiles just weeks ahead of the summer driving season have
attracted fresh fund buying.
Gold <XAU=> edged higher to $948.75 an ounce.
(Additional reporting by Amanda Cooper and Naomi Tajitsu,
editing by David Christian-Edwards)
