* Wall Street rises on economic, corporate outlook jitters
* Oil rises above $49 a barrel on weaker dollar
* Euro rises against dollar as risk aversion eases
(Recasts, updates prices, adds comment)
By Herbert Lash
NEW YORK, April 23 (Reuters) - Wall Street shares rose on
Thursday as surprising regional bank earnings gave investors
hope the U.S. economy was on the mend despite fresh evidence of
a deep recession that helped drive gold over $900 an ounce.
U.S. stocks mimicked Wednesday's session, with shares
moving in and out of positive territory, but they ended higher
after a late-day surge. The opposite happened though in the
previous session, with most stocks moving lower just before the
market closed.
"It's still about the banks. We're all still wondering
about the stress tests," said Frank Lesh, a futures analyst and
broker at FuturePath Trading LLC in Chicago.
Worries over what the U.S. government's "stress tests" on
19 major U.S. banks will reveal have kept uncertainty high. The
government is set to unveil the results on May 4.
Oil, meanwhile, rose above $49 a barrel as a weak dollar
outweighed concerns about falling global demand and rising
inventories in the United States, the world's top energy
consumer.
In the currency market, the euro touched a one-week high
versus the dollar as global risk aversion eased after data
showed the euro zone's services and manufacturing sectors
posted their best performance in six months in April. For
details, see []
Pockets of recovery could also be seen in European banks
after Credit Suisse <CSGN.VX> posted first-quarter results that
doubled expectations and Britain's Barclays Plc <BARC.L> said
it intends to resume dividend payments. []
In the United States, several large regional banks also
posted better-than-expected quarterly results, providing a
glimmer of hope for a sector that has been battered by higher
loan losses in a recessionary economy.
Improved bank earnings offset gloomy U.S. economic reports,
one of which showed that the number of laid-off American
workers filing claims for jobless benefits rose last week.
Another report indicated that sales of previously owned homes
fell in March, data showed, suggesting the 16-month-old U.S.
recession was far from over. [].
"The data is a bit disappointing for the market," said BNP
Paribas analyst Michael Widmer. "There is still uncertainty.
People are asking themselves at what stage the economy will
bottom out."
U.S. STOCK INDEXES, TREASURIES RISE
At 4;34 pm, the Dow Jones industrial average <> was up
70.49 points, or 0.89 percent, at 7,957.06. The Standard &
Poor's 500 Index <.SPX> rose 8.37 points, or 1.0 percent, to
851.92. The Nasdaq Composite Index <> gained 6.09 points,
or 0.37 percent, to 1,652.21.
Investors found some relief as a few companies, including
Apple Inc <AAPL.O>, posted stronger-than-expected results and
the regional U.S. banking results cushioned stock declines.
The pan-European FTSEurofirst 300 <> index of top
shares, however, fell 0.4 percent to 791.95 points.
The euro <EUR=>, meanwhile, rose 1.2 percent to $1.3149
after touching a one-week high of $1.3160, according to Reuters
data.
Sterling also recovered against the dollar after a sharp
sell-off Wednesday following the announcement of the British
budget, which showed a rapid deterioration in public finances.
"The euro is seeing a bit of a respite," said Andy Busch,
chief foreign exchange strategist at BMO Capital in Chicago.
Against the yen, the U.S. dollar <JPY=> was flat at 98.02
yen.
Oil, on the other hand, gained slightly on the dollar's
weakness. A falling dollar can boost the appeal of oil and
commodities to investors as an inflation hedge.
U.S. crude <CLc1> was up 86 cents at $49.71 a barrel, after
dropping as much as 48 cents in early Asian trade. London Brent
crude <LCOc1> was up 33 cents at $50.14.
In the debt market, U.S. government bonds rose, aided by
Federal Reserve purchases of Treasuries and some late-afternoon
short-covering. The short-covering occurred when stocks erased
gains and went negative in mid-afternoon trade. In the last
minutes of trading, however, stocks returned to the plus
column.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
2/32 in price to yield 2.93 percent. The 2-year U.S. Treasury
note <US2YT=RR> edged up 1/32 in price to yield 0.94 percent.
Spot gold prices <XAU=> rose $17.25 to $906.40 an ounce.
Stocks staged a comeback across most of Asia as a
larger-than-expected profit from Korea's Hyundai fed optimism
that the auto sector could be nearing a turnaround.
Japan's Nikkei <> added nearly 1.4 percent, while
MSCI's index <.MIAPJ0000PUS> of Asia Pacific shares excluding
Japan gained 1.3 percent.
(Reporting by Leah Schnurr, Vivianne Rodrigues, Burton
Frierson, and Gertrude Chavez-Dreyfuss in New York; Joanne
Frearson, Emelia Sithole-Matarise, Christopher Johnson, Alex
Lawler, Rebekah Curtis and Jan Harvey in London; writing by
Herbert Lash)
