* Global stocks rebound as risk appetite returns
* Yen slips as Japan downgrades economic outlook
* Oil rebounds from recent losses, gold rises
* U.S. President's speech on budget plan on tap
(Updates market action)
By Richard Leong
NEW YORK, April 13 (Reuters) - Global stock markets
recovered on Wednesday from a sharp sell-off, and the yen
slipped after Japan scaled back its economic outlook due to
last month's earthquake and tsunami.
Commodity prices reversed a steep two-day decline, led by
oil after data showed the largest weekly fall in gasoline
inventories since 1998.
On Wall Street, however, stocks struggled to maintain
gains, despite strong profit growth from JPMorgan Chase & Co
<JPM.N>, the No. 2 U.S. bank. Analysts questioned whether the
results from JPMorgan, the first major Wall Street bank to
report this quarter, were a one-time win or would translate to
others' performance.
A U.S. government report showed U.S. consumers spent at a
decent clip in March, allaying some concerns that lofty energy
costs will cause a global slowdown. []
"Economic fundamentals are supportive for stocks and
commodities, which are all predicated on global growth," said
Mark Luschini, chief market strategist at Janney Montgomery
Scott based in Philadelphia.
Prices of Brent crude oil rose above $122 a barrel,
rebounding from a two-day sell-off caused by worries that high
prices would crimp demand, while gold firmed on a weaker U.S.
dollar.
World stocks as measured by MSCI <.MIWD00000PUS> were up
0.4 percent for about 4.5 percent year-to-date gain. Much of
the gain came from emerging markets <.MSCIEF>, which gained
more than 0.6 percent.
The Dow Jones industrial average <> was down 5.04
points, or 0.04 percent, at 12,258.54. The Standard & Poor's
500 Index <.SPX> was down 1.31 points, or 0.10 percent, at
1,312.85. The Nasdaq Composite Index <> was up 9.95
points, or 0.36 percent, at 2,754.74.
"People are getting the sense that no matter what these
companies say, the easy money has already been made so it will
be tough to see further upward movement," said Rick Fier, vice
president at Conifer Securities in New York, which has about $7
billion in assets under administration.
U.S. President Barack Obama was due to speak at about 1:30
p.m. (1730 GMT) to outline his plan for tackling the long-term
U.S. deficit and debt in a speech in which he is expected to
push for higher taxes for the rich and changes to government
pension and healthcare plans. []
The dollar has weakened against most major currencies this
year on concerns over the huge $1.5 trillion federal budget.
The U.S. dollar, however, has firmed versus the yen since
late March as Japan faces the daunting task of rebuilding after
the ravaging quake and tsunamis that hit the country last
month.
The benchmark Nikkei index <> rose 0.9 percent on the
day in thin volume. Analysts suggested the full impact of the
country's disasters, as outlined in the government's new
assessment, was still not clear.
A Bank of America-Merrill Lynch fund manager poll Tuesday
showed investors rapidly cutting their exposure to Japanese
equities, although some big firms have been buying.
In Europe, the FTSEurofirst 300 <> closed up 0.7
percent, a day after posting its biggest one-day fall in a
month.
YEN FALLS, EURO RISES
The yen ended a four-session winning streak against the
euro and dollar following the Japanese government's lowered
economic outlook, its first downgrade in six months.
[]
The euro touched a 15-month high against the dollar at
$1.4521 on EBS trading platform.
The euro continued to be buoyed by the prospect of further
interest rate rises by the European Central Bank while monetary
policy stays loose in the U.S. and Japan.
The dollar was up about 0.6 percent at 84.02 yen after
sliding more than 1.2 percent Tuesday for its biggest one-day
percentage drop in four months. []
"If there is no pullback in oil and other commodity prices
then I think going forward the yen will be very vulnerable,"
said Niels Christensen, currency strategist at Nordea in
Copenhagen.
In bond trading, U.S. government debt prices were flat,
erasing earlier losses tied to data on domestic retail sales
were not as weak as some traders had bet on.
The U.S. Treasury will sell $21 billion in 10-year notes
later Wednesday. For more, see []
(Additional reporting by Angela Moon in New York; Jeremy
Gaunt, Brian Gorman, Jessica Mortimer, Barbara Lewis, Jan
Harvey in London; Editing by Leslie Adler)
