* S&P, Nasdaq rise on bank earnings hopes; Boeing hits Dow
* Oil falls after IEA cuts 2009 world demand forecast more
* Bonds rise on uncertainty over corporate earnings.
* Dollar, yen ease vs euro as safe-harbor buying slides
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, April 13 (Reuters) - U.S. stocks rose on Monday
as sentiment toward key earnings reports turned positive on
speculation bank results will surprise on the upside this week,
while oil fell after a forecast for world oil demand was cut.
The Dow industrials, however, slipped after Boeing <BA.N>
gave a gloomy profit forecast on Thursday and slashed output,
reviving concerns about corporate profitability and the U.S.
economy's health.
China-related news and speculation were major drivers amid
light trading volume that exacerbated price moves across asset
classes. Many financial centers were closed in Europe and in
parts of Asia for the extended Easter holiday.
U.S. government bond prices rose as the Federal Reserve
stepped up purchases of Treasury and agency debt, and the
dollar and yen fell against the euro as improved appetite for
risk eroded the safe-haven appeal of the U.S. and Japanese
currencies.
Worries about General Motors' <GM.N> fate, along with a
pullback in oil prices, also helped drag down the Dow.
But the S&P 500 rebounded on optimism that big banks will
post reassuring quarterly results later this week.
"There's a general perception that the banks may have
turned the corner. Whether that's true or not, I'm not sure
anybody can answer that until we get some more earnings," said
Mark Coffelt, chief investment officer at Empiric Funds in
Austin, Texas.
"Any loans these guys make, their cost of funds is close to
zero. Whatever they're lending, they're making a ton of money,"
Coffelt said.
After markets closed, Goldman Sachs Group Inc <GS.N> posted
higher-than-expected first-quarter earnings of $1.66 billion,
helped by strong trading revenue, and said it plans to raise $5
billion of common shares.
The bank posted net income of $3.39 a share, compared with
analysts' average forecast of $1.49 a share, according to
Reuters Estimates.
The Dow Jones industrial average <> closed down 25.57
points, or 0.32 percent, at 8,057.81. The Standard & Poor's 500
Index <.SPX> rose 2.17 points, or 0.25 percent, at 858.73. The
Nasdaq Composite Index <> added 0.77 points, or 0.05
percent, at 1,653.31.
Data showed Chinese crude imports rose to their second
highest level ever but crude prices fell and offset the
International Energy Agency's slashing Friday of a world
forecast on world oil demand.
The IEA said world oil demand would fall by 2.4 million
barrels per day this year compared with 2008 as the rate of
contraction in fuel consumption reached levels last seen in the
early 1980s.
A report that China was considering more stimulus steps to
promote growth boosted investors' optimism, leading the
high-yielding Australian and New Zealand dollars to advance.
Platinum rose to a near seven-month high on fund buying and
signs of recovering Chinese demand.
"The major theme today is China and the positive outlook
for a recovery, with the Australian and New Zealand dollars
benefiting from the theme," said Andrew Busch, global FX
strategist at BMO Capital Markets in Chicago in a note to
clients.
"The greenback and Japanese yen are losing value against
most major currencies with market appetite for risk increasing
with the recent string of positive equity moves," Busch said.
Oil fell. U.S. crude <CLc1> settled $2.19, or nearly 4.2
percent, lower at $50.05 while ICE Brent crude <LCOc1> shed
$1.92 to $52.14.
Gold futures briefly rose above $900 an ounce in thin
holiday trade. U.S. gold futures for June delivery <GCM9>
settled up $12.50 at $895.80 an ounce in New York.
Bond prices rose as the Fed bought $7.37 billion of
Treasuries, near the high end of recent purchases. It also took
on $7.93 billion in agency bonds, the biggest amount to date.
Such support was enough to offset a late-day rebound in
stocks, which were bolstered about hopes that bank earnings
might offer some positive surprises.
"The U.S. government is the 800-pound gorilla in the bond
market," said Andrew Brenner, vice president at MF Global.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
16/32 in price to yield 2.86 percent. The 2-year U.S. Treasury
note <US2YT=RR> rose 5/32 to yield 0.88 percent.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> down 1.17 percent at 84.533.
The euro <EUR=> rose 1.44 percent at $1.3376. Against the
yen, the dollar <JPY=> was down 0.15 percent at 100.07.
(Reporting by Leah Schnurr, Nick Olivari, Pedro Nicolaci da
Costa and Timothy Gardner and Frank Tang in New York and Alex
Lawler and Barbara Lewis in London; writing by Herbert Lash;
Editing by Leslie Adler)
