Global stocks rose and the euro hit a one-month high on Wednesday, helped by brighter prospects for resolving Spain's debt woes, but disappointing quarterly earnings from Intel Corp and IBM weighed on US equity markets.
US and German government debt prices fell after Spain avoided a damaging ratings downgrade from Moody's and stronger-than-expected US housing data pointed to an improving economy, which reduced safe-haven demand.
Growing speculation that Spain will ask for a bailout next month lifted the euro. A possible line of credit to Spain and some easing of German opposition to aid for Greece and Spain were also likely to support the euro in the near term.
Wall Street opened mixed, with the Dow pulled lower by Intel and IBM. But the Nasdaq rebounded to climb higher, building on the best two-day advance for U.S. stocks in a month.
Intel slumped 1.9% to $21.92 while IBM lost 3.8% to $203.05. Both were among the biggest drags on the Dow and Nasdaq 100.
"These are some fairly big disappointments, and while we think we'll see better results out of tech, it's clear the market doesn't think we'll see much growth in names like Intel or IBM," said Richard Sichel, who oversees $1.8 billion as chief investment officer at Philadelphia Trust Co.
The Dow Jones industrial average was down 5.49 points, or 0.04%, at 13,546.29. The Standard & Poor's 500 Index was up 5.19 points, or 0.36%, at 1,460.11. The Nasdaq Composite Index was up 7.29 points, or 0.24%, at 3,108.46.
MSCI's all-country world equity index rose 0.7% to 337.99, extending Tuesday's 1.2% gain. The FTSE Eurofirst 300 index of top European shares gained just 0.4% to 1,117.14.
The euro was up 0.6% at $1.3123, its highest since mid-September.
Bond losses accelerated after data showed that groundbreaking on new US homes surged in September to its fastest pace in more than four years, another sign that the housing sector's budding recovery is gaining traction.
"The housing starts and permits are both up a ton. The market was already selling off, it started overnight with Moody's affirming Spain's investment grade rating," said James Newman, head of Treasuries and Agency trading at Keefe, Bruyette and Woods in New York.
Benchmark 10-year notes fell 16/32 in price to yield 1.78%, the highest since September 21.
Brent crude oil fell as worry about the global economy overshadowed relief that Spain avoided a ratings downgrade.
December Brent fell 30 cents to $113.70 a barrel. U.S. oil for November gained 56 cents to $92.65.
