* Global shares rise on banking sector optimism
* Euro slides from 7-week high versus dollar
* Oil bounces above $73 on expected inventory drop
* Bonds fall as safe-haven bid eases on stock rally
(Adds open of U.S. markets; byline, dateline, previous
LONDON)
By Herbert Lash
NEW YORK, July 7 (Reuters) - Global stocks turned higher on
Wednesday on a brighter outlook for banks on both sides of the
Atlantic while oil prices snapped a six-day slide on an
expected fall in U.S. crude inventories.
A higher earnings outlook from State Street Corp <STT.N>,
the world's No. 2 custodian bank, lifted Wall Street as
European shares turned positive. Banks pared losses on hopes
the results from impending stress tests may not be as bad as
feared.
Worries about the strength of economic recovery were offset
after State Street said it would post second-quarter operating
earnings of 93 cents a share, compared to forecasts of 72 cents
a share. For details, see []
"The earnings data provided by State Street is one of the
key factors boosting the market today," said Nick Kalivas, an
analyst at MF Global in Chicago.
Kalivas said investors were starting to reposition ahead of
earnings season next week, and the State Street forecast
reinforced expectations that banks would perform well, without
exposure to trading.
U.S. banks rallied after losing heavily in recent weeks,
with the BKW bank index <.BKX> up 2.6 percent.
The STOXX Europe 600 banking index <.SX7P> rose 0.4
percent, reversing earlier sharp losses.
The Committee of European Bank Supervisors was expected to
outline its methodology for a stress test that simulates the
impact of a severe economic shock on about 100 banks in the
euro zone and other countries, sources said. []
Analysts also took a benign view of a slide in German
manufacturing orders for the first time this year in May. They
said it was mostly a technical correction as industrial
production in Europe's largest economy continued to recover.
[]
MSCI's all-country world equity index <.MIWD00000PUS> rose
0.7 percent, but its emerging market index <.MSCIEF> remained
in the red.
On Wall Street, the Dow Jones industrial average <>
gained 106.87 points, or 1.10 percent, to 9,850.49. The
Standard & Poor's 500 Index <.SPX> rose 11.89 points, or 1.16
percent, to 1,039.95. The Nasdaq Composite Index <> added
21.62 points, or 1.03 percent, to 2,115.50.
The euro fell from seven-week highs against the dollar amid
lingering concerns about the growth outlook for the global
economy and as investors scrutinized details of the financial
test for European banks. []
The euro <EUR=> was down 0.05 percent at $1.2617. Against
the yen, the dollar <JPY=> dipped 0.31 percent at 87.28.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.11 percent at 83.991.
As Wall Street rallied, safe-have assets like bonds fell.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 7/32 in price to yield 2.96 percent.
Crude oil gained. Andy Sommer, energy market analyst with
EGL in Switzerland, said prices were supported ahead of two
widely watched reports on weekly U.S. oil data.
U.S. light sweet crude oil <CLc1> rose $1.48 to $73.46 per
barrel, while ICE Brent crude futures <LCOc1> were up $1.46
cents at $72.91.
Spot gold prices <XAU=> increased 70 cents to $1,192.90 an
ounce.
Copper fell more than 1 percent, retreating after Tuesday's
rally as weaker data knocked the demand outlook and a rising
dollar deterred non-U.S. investors. []
Asian stocks slipped as investors worried that global
growth was faltering, with the MSCI index of Asia Pacific
shares outside Japan <.MIAPJ0000PUS> shedding almost 1 percent.
Japan's Nikkei average <> ended down 0.6 percent.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Reporting by Edward Krudy, Vivianne Rodrigues, Richard Leong
in New York; Ian Chua, Ikuko Kurahone, Brian Gorman and Rebekah
Curtis in London; writing by Herbert Lash; editing by Jeffrey
Benkoe)
