(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, May 12 (Reuters) - World stocks rose on Monday
after better-than-expected results at HSBC, Europe's largest
bank, and U.S. bond insurer MBIA eased worries about the impact
of a credit crisis and crude oil fell below $125 a barrel.
Optimism in equity markets was in contrast to U.S. Treasury
debt prices, which rose after Chicago Federal Reserve President
Charles Evans said U.S. consumers were "under a lot of stress,"
underscoring the fragile state of the world's biggest economy.
The dollar firmed against the euro and yen toward last
week's two-month peak and gold prices fell. Record high oil
prices may help gold, a traditional hedge against inflation,
defy declining demand from jewelers and other physical buyers.
In the U.S. stock market, the Nasdaq gained more than 1
percent as investors snapped up big-cap technology shares on
hopes the U.S. economy may not be in as bad shape as previously
feared.
Major financial markets were calm after a strong earthquake
jolted China's southwest province of Sichuan. Shanghai stocks
fell around 1 percent before closing higher on the day, while
the yuan <CNY1MNDFOR=> slipped in offshore non-deliverable
forwards against the U.S. dollar.
HSBC's results added to a growing perception among
investors that banks are making solid strides in cleaning up
balance sheets that have been hit hard by the nine-month-old
credit crisis. The worst of the financial turmoil may have
passed.
"There are signs that the financial market crisis is
easing. Financial institutions are starting to offload bad
loans and recapitalize," said Christine Li, European economist
at Moody's research arm Economy.com.
However, she added, "The worst of the crisis might be over,
but the pain to the real economy and the corporate sector could
still lie ahead."
The Dow Jones industrial average <> was up 92.00
points, or 0.72 percent, at 12,837.88. The Standard & Poor's
500 Index <.SPX> was up 8.99 points, or 0.65 percent, at
1,397.27. The Nasdaq Composite Index <> was up 28.14
points, or 1.15 percent, at 2,473.66.
Shares of MBIA <MBI.N> rose 5.5 percent to $9.95 after the
bond insurer said its new business volumes appear to be rising
in the current quarter.
Shares of Research In Motion Ltd <RIM.TO><RIMM.O> rose 6.4
percent to $141.19 on optimism about its new BlackBerry Bold
smartphone.
In Europe shares rose in quiet trade on HSBC's <HSBA.L>
results and on energy stocks, due to high crude oil prices.
The FTSEurofirst 300 <> index of top European shares
closed unofficially at 1,346.47 points, up 0.3 percent. Volumes
in Europe were thin due to partial holidays in some countries.
HSBC climbed 1.9 percent. Among energy stocks, France's
Total <TOTF.PA> rose 1.4 percent and British group BP <BP.L>
was up 1.1 percent.
HSBC said its profit in the first quarter rose from a year
ago as growth in Asia helped counter some $5 billion in hits
from bad debts on U.S. home loans and asset write-downs.
HSBC said it was increasingly likely the U.S. economy will
go into recession this year and a recovery in the U.S. housing
market was unlikely until at least 2009, but its trading
statement was more positive than those from many rivals
battered by the credit crunch.
The dollar rose against the yen and Swiss franc as
investors snapped up riskier assets such as stocks, encouraged
by a dip in oil prices and HSBC's earnings.
The dollar fell against major trading-partner currencies,
with the U.S. Dollar Index <.DXY> down 0.23 percent at 72.946.
But the dollar rose against the yen <JPY=> up 0.96 percent
at 103.82, and fell against the euro <EUR=>, which was up 0.32
percent at $1.5531.
"With equities moving higher, we are having a little flow
back into carry trades, which is helping euro/yen and propping
the euro up against the dollar, in addition to sterling and the
other high yielders," said Mark Meadows, senior currency
strategist at Tempus Consulting in Washington.
U.S. Treasury debt prices were mixed.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
4/32, with the yield at 3.7616 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 2/32, with the yield at
2.2679 percent. The 30-year U.S. Treasury bond <US30YT=RR> was
up 12/32, with the yield at 4.503 percent.
U.S. light sweet crude oil <CLc1> fell $1.16, or 0.92
percent, to $124.80 per barrel.
Spot gold prices <XAU=> fell 60 cents, or 0.07 percent, to
$883.30.
In Asia, shares in Tokyo <> closed 0.6 percent higher
as exporters such as Canon Inc <7751.T> recovered as the yen
retreated, easing a potential squeeze on profits.
Shares across the rest of Asia <.MIAPJ0000PUS> were up 0.5
percent.
(Reporting by Caroline Valetkevitch, John Parry, Lucia
Mutikani and Lewa Pardomuan in London, and Peter Starck in
Frankfurt; Editing by Leslie Adler)
