* Global stocks surge, boosted by China's inflation move
* Euro rises on risk appetite, euro zone hopes
* Bond prices fall as riskier assets attract investors
* Oil higher after OPEC output rollover; eyes on China
(Adds opening of U.S. markets, byline, dateline previous
LONDON)
By Herbert Lash
NEW YORK, Dec 13 (Reuters) - Global stocks rallied on
Monday, lifted by merger activity and China's moves to curb
inflation without raising interest rates, while oil prices
gained after OPEC agreed to maintain output targets.
U.S. Treasury and German bund prices fell as the prospect
for stronger growth and higher interest rates in 2011 boosted
the appetite for riskier assets at the expense of safe-haven
government debt. For details see: [] and
[]
Investors were relieved China refrained from boosting
interest rates after central bank inflation data over the
weekend showed signs that price pressures are broadening beyond
food. []
China's central bank raised reserve requirements for banks
instead of benchmark interest rates, easing concerns that a
tightening of its monetary policy could lead to a slowdown in
one of the major growth engines of the global economy.
[]
European shares were on track to post their sixth straight
session of gains, and MSCI's all-country world stock index
<.MIWD00000PUS> rose 0.7 percent.
The pan-European FTSEurofirst 300 <> index of top
shares was up 0.4 percent, having earlier hit its highest
intraday level since late September 2008.
"We have two major economies spearheading growth in 2011,
the United States and China, and that is pushing markets ahead
and leaving the difficulties with the euro zone to one side for
now," said Mike Lenhoff, chief strategist at Brewin Dolphin.
The Dow Jones industrial average <> gained 15.37
points, or 0.13 percent, to 11,425.69. The Standard & Poor's
500 Index <.SPX> added 2.80 points, or 0.23 percent, to
1,243.20. The Nasdaq Composite Index <> rose 3.20 points,
or 0.12 percent, to 2,640.74.
Merger activity helped lifted U.S. equities.
General Electric Co <GE.N> will buy British oilfield
services company Wellstream Holdings Plc <WSML.L> for about 800
million pounds ($1.3 billion), while Dell Inc <DELL.O> will
acquire Compellent Technologies Inc <CML.N>, a data storage
company, for $960 million.
"Some have been arguing that the market is tired after such
a strong rally and is due for a pullback," said Peter Cardillo,
chief market economist at Avalon Partners in New York. "But the
relief factor from China, although temporary, and a flurry of
M&A this morning is all pointing to a further rally."
Copper, which is used in power and construction, hit a
record high, while gold extended gains above $1,390 an ounce
and the dollar surrendered early gains against the euro.
The euro extended gains against the dollar, hitting a
session high just above $1.33, with traders citing a more
tolerant attitude toward risk after China's move to cool
inflation. []
"It seems the market is comfortable with a euro just above
$1.30, and for now, it would take very specific developments to
push it out of its recent range -- call it $1.3150 to $1.3450,"
said Matthew Strauss, a strategist at RBC Capital Markets.
Bond prices fell. The benchmark 10-year U.S. Treasury note
<US10YT=RR> was down 5/32, with the yield at 3.3404 percent.
The Organization of the Petroleum Exporting Countries
agreed, as expected, on Saturday to maintain its production
policy and leading member Saudi Arabia said it still favored
oil prices between $70 and $80 per barrel. []
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.5 percent at 79.647.
The euro <EUR=> was up 0.60 percent at $1.3313, while
against the Japanese yen, the dollar <JPY=> was down 0.23
percent at 83.72.
U.S. light sweet crude oil <CLc1> rose $1.60 to $89.38 a
barrel.
Asian stocks posted modest gains, helped by a nearly 3
percent rise in Chinese shares on Beijing's latest policy
moves. MSCI's Asia index, excluding Japan, <.MIAPJ0000PUS> rose
0.5 percent, and Japan's Nikkei average <> closed 0.8
percent higher.
(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 Steven C. Johnson, Ellen Freilich in New York;
Kirsten Donovan and Harpreet Bhal in London; writing Herbert
Lash; editing by Jeffrey Benkoe)
