By Sinead Carew
NEW YORK (Reuters) - Equity markets rebounded on Monday after China took steps to stimulate its economy and Wall Street also rose on corporate earnings, while the euro weakened further on worries about Greece.
The Chinese central bank on Sunday cut the amount of cash banks must hold as reserves in its latest attempt to spur lending and combat a slowing economy. The news followed reports last week about a crackdown on margin lending there, which had sent global equity markets lower on Friday.
"It's primarily a snap-back rally from the very bad day Friday," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, citing the news out of China and U.S. corporate earnings.
"Earnings season seems less bad than expected," Tuz said, though he added: "It could change on a dime this week because this is the busiest earnings week."
Nearly 76 percent of the S&P 500 components that have reported results so far have topped analysts' earnings expectations, topping the 70 percent average in the last four quarters. But just 47 percent beat on revenue, compared with the 58 percent average.
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The dollar rose as the euro was stung by gathering concerns that Greece could default on its debt or leave the single currency within months.
The European Central Bank's vice president said on Monday that a country that defaults would not have to leave the euro, in frank remarks about Greece that also touched on possible capital controls and showed how acute Athens' problems have become.
The euro was down 0.63 percent against the dollar in the late afternoon, deepening its decline as the day when on. The dollar was up 0.4 percent against a basket of major currencies.
The pan-European FTSEurofirst 300 index of top regional shares gained 0.83 percent to 1,620.43 while MSCI's all-country world index was up 0.37 percent.
The Dow Jones industrial average rose 208.63 points, or 1.17 percent, to 18,034.93, the S&P 500 gained 19.22 points, or 0.92 percent, to 2,100.4, and the Nasdaq Composite added 62.79 points, or 1.27 percent, to 4,994.60.
Shares of Apple Inc climbed 2.28, while IBM jumped 3.42 percent. After the bell, IBM posted first-quarter results that exceeded expectations, sending its shares up an additional 2.4 percent in extended trade.
The Information Technology component of the S&P 500 closed up 1.79 percent
U.S. Treasuries prices fell on Monday as stronger U.S. stocks reduced safe-haven demand for bonds, though traders remained wary about the future of cash-strapped Greece staying in the euro zone bloc.
Oil prices rose in volatile trading as a report of strong U.S. consumption last week and a warning from Saudi Arabia's Interior Ministry about possible attacks on energy installations there offset earlier comments indicating Saudi production would stay near record levels in April. [O/R]
Oil services firm Genscape reported a draw of more 900,000 barrels at the Cushing, Oklahoma delivery point for U.S. crude between Tuesday and Friday last week, market sources said. For the week to Friday, Genscape reported a build of about 350,000 barrels, they said.
U.S. crude for May delivery settled up 64 cents at $56.38 after falling as low as $54.85 earlier in the session while Brent crude settled at $63.45 a barrel, unchanged from the day before, after falling as low as $62.10 earlier.
(Additional reporting by Barani Krishnan in New York; Editing by James Dalgleish, Meredith Mazzilli and Leslie Adler)