(Updates after IBM results)
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 14 (Reuters) - Equities took comfort from
better-than-expected results from IBM <IBM.N> on Monday, setting
the stage for a higher Wall Street opening, but gold soared to
record highs on worries about the global economy.
International Business Machines beat analysts estimates,
lifting European stocks and boosting U.S. stock index futures.
MSCI's main world stock index <.MIWD00000PUS> was up 0.5
percent and its emerging market gauge <.MSCIEF> up 0.3 percent.
European shares rose after losing ground for six sessions in a
row on persistent concerns over the prospect of a U.S.
recession.
The FTSEurofirst 300 <> index of top European shares
was up 0.5 percent. But it has lost nearly 5 percent so far in
2008, easily wiping out all of its 2007 gains.
Japan's stock markets were closed for a holiday.
Investors are keenly eyeing the start of fourth quarter
earnings seasons for U.S. companies, generally expecting a poor
performance.
Earnings from S&P 500 <.SPX> companies are expected by
analysts to have fallen more than 8 percent, according to
Reuters Estimates. This has set up the potential for positive
surprises.
Worries about the slowing global economy and the chances of
recession in the United States, however, were the main focus
with investors eyeing a likely interest rate cut from the U.S.
Federal Reserve before the month is out.
The Fed is widely expected to cut rates by 50 basis points
to 3.75 percent on Jan. 30, although some analysts have been
suggesting an emergency meeting could come earlier.
Poor economic data and lingering worries about inflation,
meanwhile, were driving investors into gold and other precious
metals. Spot gold <XAU=> hit a record high of $914 an ounce
before dropping back to around $907 an ounce.
Safe-haven buying also pushed platinum <XPT=> to a record
high of $1,590.50 an ounce and silver <XAG=> rallied to its
highest in 27 years at $16.58 an ounce.
DOLLAR DOWN
The dollar fell broadly with investors continuing to take a
bearish stance on the U.S. economy and expecting interest rate
cuts to erode the currency's appeal further.
The euro rose as high as $1.4914 <EUR=>, not far off an
all-time high of $1.4966 set in November, according to Reuters
data.
The dollar fell as low as 107.37 <JPY=>.
"(Dollar weakness) is primarily a function of the fact that
the outlook on the U.S. economy is in doubt leading to fears of
a global slowdown. As long as this is the case the dollar is
going to be under pressure," said Teis Knuthsen, head of FX
research at Danske Markets in Copenhagen.
Euro zone government bond prices were generally higher. The
interest rate-sensitive two-year Schatz yield <EU2YT=RR> was
flat at 3.702 percent and the 10-year Bund yield <EU10YT=RR> was
down at 4.062 percent.
