Stocks surged and the euro snapped a three-day decline against the dollar as China said it remains a long-term investor in Europe, damping concerns that the region’s debt crisis will worsen. Commodities jumped and Treasuries fell.
The MSCI World Index, a gauge of equities in 24 developed nations, climbed 2.6 per cent at 11:07 am in New York. The Standard & Poor’s 500 Index jumped 2.5 per cent. The euro strengthened 1 per cent against the dollar, rebounding from near a four-year low, and appreciated 1.9 per cent compared with the yen. Oil and copper advanced for a second day. Yields on 10-year Treasury notes jumped 15 basis points to 3.34 per cent.
The Stoxx Europe 600 Index rose to a one-week high and the Dow Jones Industrial Average rebounded above 10,000 after closing below for the first time since February. China’s foreign exchange regulator said reports it was reviewing euro holdings are ‘groundless’, boosting optimism the European debt crisis is stabilising. Italian Prime Minister Silvio Berlusconi plans $30.4 billion in budget cuts and Spain’s Jose Luis Rodriguez Zapatero won parliamentary approval for austerity measures.
US stocks rallied even after government data showed the economy grew at a slower pace than previously calculated in the first quarter and jobless claims fell less than economists estimated.
