(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, April 23 (Reuters) - Global stocks edged higher
on Wednesday as optimism in the technology sector offset more
gloom in financial shares, while the euro posted its biggest
drop against the dollar in three weeks.
Oil steadied as U.S. government data showed crude stocks
rising, which eased supply concerns that had sent prices to a
record high near $120 a barrel on Tuesday.
Demand for the euro slid as soft economic data and comments
by European policy-makers indicated that a weaker U.S. currency
is hurting economic growth in Europe, curbing expectations that
the European Central Bank will raise interest rates further.
The euro is up more than 9 percent this year, making euro zone
exports more expensive.
U.S. and European equities markets were choppy, with the
Dow and benchmark Standard & Poor's 500 Index see-sawing
between positive and negative territory in the United States
before closing higher.
The tech-rich Nasdaq stock market rose more than 1 percent
led by strong results from chip maker Broadcom <BRCM.O> and
expectations that iPod maker Apple <AAPL.O> will deliver robust
earnings when it reports after the bell on Wednesday.
The optimistic view on Apple's results also helped drive
European stocks to close higher, reversing earlier losses on
gloom in the banking sector.
In the U.S. market, Boeing Co's <BA.N> forecast-beating
quarterly profit also lifted investor optimism, but financial
stocks declined on fear of further write-downs and a wider loss
than analysts' expected at bond insurer Ambac Financial Group
<ABK.N>.
"Basically what you had was the positive of Boeing plus a
big acquisition of an insurer offset by problems with Ambac and
the bond insurers," said Jim Awad, chairman of W.P. Stewart &
Co. Ltd. in New York.
The Dow Jones industrial average <> was up 42.99 points,
or 0.34 percent, at 12,763.22. The Standard & Poor's 500 Index
<.SPX> was up 4.01 points, or 0.29 percent, at 1,379.95. The
Nasdaq Composite Index <> was up 28.27 points, or 1.19
percent, at 2,405.21.
Ambac shares plunged 42.6 percent to close at $3.46, after
falling to a more than 10-year low of $3.08 earlier.
"Ambac lost more money than people thought," said Al
Goldman, chief market strategist at Wachovia Securities in St.
Louis. "That was kind of a shock to the system, but I think
that is a worry that will be on the back burner soon."
Results at Boeing, which has been beset by delays with its
787 Dreamliner, easily beat Wall Street forecasts on rising
deliveries of commercial planes and more efficient
manufacturing operations.
U.S. companies with big international ties have
outperformed those with mostly domestic operations so far in
the reporting period.
Broadcom beat its quarterly revenue target and forecast
sales growth in the current quarter, relieving investor concern
about enterprise spending in a weak U.S. economy.
Broadcom shares surged more than 16 percent and Boeing's
stock added 4.5 percent.
Financial shares <.GSPF> declined with the Ambac fall as
investors fretted anew about the impact of a global credit
crunch sparked by fallout from subprime mortgage lending.
EUROPEAN SHARES UP ON EARNINGS OPTIMISM
In Europe shares ended higher, driven by optimism over
earnings outside the financial sector.
The FTSEurofirst 300 index <> of top European shares
rose 0.7 percent at 1,313.20 points.
Optimism in the technology sector and bid talk in
industrials helped push up shares in chip equipment maker ASML
<ASML.AS> by 7.7 percent and in France's Alstom <ALSO.PA> by
4.6 percent on talk that telecoms and construction group
Bouygues <BOUY.PA> may increase its stake in the group.
"The earnings season has come in a bit better so far and we
have had a representative sample" of companies reporting, said
Philippe Gijsels, a strategist for Fortis Bank in Brussels.
"Outside financials, things are fairly good, especially in
technology, where we've had some good figures," he said.
Demand for the euro eased after a decline in manufacturing
and comments by a European Central Bank Governing Council
member, Christian Noyer, dampened speculation of further rate
hikes.
The RBC/NTC Eurozone Purchasing Managers Index for
manufacturing dropped to 50.8 in April, near a three-year low.
German manufacturing activity also fell, although both German
and euro zone readings for the service economy rose.
"The market may have gotten ahead of itself betting on a
rate hike by the ECB," said Omer Esiner, a market strategist at
Ruesch International in Washington.
The euro <EUR=> fell 0.59 percent to $1.5893, while the
dollar rose against major trading-partner currencies, with the
U.S. Dollar Index <.DXY> up 0.67 percent at 71.816.
Against the yen, the dollar <JPY=> rose 0.42 percent at
103.42.
Euro zone government bonds rose as markets scaled back
expectations for a possible boost to ECB interest rates.
CRUDE INVENTORIES RISE
The latest weekly fuel inventory data from the U.S. Energy
Information Administration showed a bigger-than-expected rise
in crude oil inventories and a big drop in gasoline stocks,
which pushed oil prices lower.
"There's plenty of crude out there," said Phil Flynn,
analyst at Alaron Trading.
Crude <CLM8> for June delivery, representing a new
front-month contract, settled up 23 cents or 0.19 percent at
$118.30 a barrel in New York.
May crude <CLK8> expired Tuesday, rising $1.89 to settle at
a record $119.37.
Spot gold prices <XAU=> fell $12.00 to $905.30.
The 30-year U.S. Treasury bond <US30YT=RR> fell over a full
point in price in curve-steepening trades and rising concerns
about growing inflation.
U.S. Treasury debt prices were mixed.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 11/32, with the yield at 3.7392 percent. The 2-year U.S.
Treasury note <US2YT=RR> was unchanged with the yield at 2.2101
percent. The 30-year U.S. Treasury bond <US30YT=RR> was down
22/32, with the yield at 4.4942 percent.
Asian shares shrugged off near-$120 a barrel oil and a weak
dollar to resume an equities rally that has recovered all the
ground lost last month.
MSCI's index of Asian stocks outside Japan <.MIAPJ0000PUS>
rose 1.1 percent, and has gained 17.4 percent since March 18.
Japan's Nikkei average index <> forged ahead early in
the day but gave up most of its gains to close up 0.2 percent.
(Reporting by Kristina Cooke, Vivianne Rodrigues in New York
and Jane Merriman, Atul Prakash in London; Editing by Leslie
Adler)
