(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, April 16 (Reuters) - Global stocks jumped on
Wednesday on reassuring results at such U.S. blue chips as
Intel and JPMorgan, while the euro soared to a lifetime peak
against the dollar on record euro zone inflation.
Oil surged to a record high over $115 a barrel as the
dollar crashed and U.S. crude and gasoline inventories fell
sharply in anticipation of America's summer driving season.
Surging energy and food prices pushed euro zone inflation
to a new high of 3.6 percent in March, which lifted the euro on
fading chances that the European Central Bank will cut interest
rates in the near term.
The rise in European inflation highlighted an interest rate
differential with the United States, where consumer prices rose
a bit less than expected and left the Federal Reserve some room
to cut rates again to combat a housing-led slowdown.
In the latest indicator of the extent of the U.S. downturn,
the Commerce Department reported that home building skidded to
a 17-year low last month. Housing starts dropped 11.9 percent
in March to an annual rate of 947,000 units, the slowest pace
since March 1991.
Euro zone and U.S. government debt prices fell on the back
of corporate results that reassured investors after recent
disappointments, especially in the hard-hit banking sector.
The three major U.S. stock indices rose more than 2
percent.
"The fact that companies that are viewed as being higher
quality, like JPMorgan and Intel, did not drop a negative
surprise on the market is causing investors to cheer today,"
said Eric Kuby, chief investment officer at North Star
Investment Management Corp in Chicago.
The Dow Jones industrial average <> rose 256.80 points,
or 2.08 percent, to close at 12,619.27. The Standard & Poor's
500 Index <.SPX> gained 30.28 points, or 2.27 percent, to
finish at 1,364.71. The Nasdaq Composite Index <> added
64.07 points, or 2.80 percent, to end at 2,350.11.
Intel <INTC.O> affirmed its profit margin target for 2008
late on Tuesday, reassuring investors concerned about falling
memory chip prices and the impact of a weak U.S. economy.
JPMorgan Chase & Co's <JPM.N> earnings fell 50 percent but
the third-largest U.S. bank was able to skirt the massive
losses that have crippled many rivals.
Intel and JPMorgan each rose about 6 percent, but Coca-Cola
Co <KO.N> barely gained because favorable exchange rates
sparked much of its positive surprise and muted Wall Street's
enthusiasm.
"When you see a tech bellwether, a consumer products
bellwether and a big financial all clocking in with good
numbers, it makes you a bit of a believer," said Edward
Bretschger, director of equity sales and trading at Calyon
Securities in New York.
European shares ended sharply higher, driven by gains in
banks after JPMorgan's results soothed investor concerns and
soaring commodity prices lifted miners and food oils.
The FTSEurofirst 300 <> index of top European shares
rose 1.65 percent to 1,302.78 points, and the commodity- and
bank-heavy British FTSE 100 <> gained 2.36 percent to
6,046.2 points.
The results at Intel and JPMorgan suggested that companies
can manage despite a slowing U.S. economy. But some investors
said it was too early to sound the all-clear.
"We remain cautious -- this is still a bear market rally,"
said Philippe Gijsels, senior equity strategist at Fortis Bank
in Brussels.
"There's lots of speculative money in the commodities space
-- equities are volatile, credit markets are difficult and cash
is not an option because of inflation," Gijsels said.
Asian stocks scored solid gains, with high-tech exporters
buoyed by the reassuring outlook from Intel and energy shares
underpinned by record high oil prices.
Japan's Nikkei average <> advanced 1.2 percent, and
MSCI's measure of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.3 percent.
Crude prices pierced $115 a barrel, with U.S. crude <CLc1>
settling up $1.14 at $114.93 a barrel after hitting a peak of
$115.07. Brent crude <LCOc1> rose $1.08 to settle at $112.66 a
barrel, off an all-time peak of $112.79 that was set earlier.
U.S. Treasury debt prices slipped as a robust rally in
stocks tempered government debt's safe-haven appeal.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 24/32 in price, with the yield at 3.70 percent. The
two-year U.S. Treasury note <US2YT=RR> was down 7/32, with the
yield at 1.98 percent.
The dollar fell against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> down 0.90 percent
at 71.38. The euro <EUR=> rose 1.05 percent to $1.5957, paring
gains after touching a record $1.5977. Against the yen, the
dollar <JPY=> fell 0.13 percent to 101.68.
Spot gold prices <XAU=> rose $16.60, or 1.79 percent, to
$944.60.
(Additional reporting by Caroline Valetkevitch, John Parry,
Steven C. Johnson and Matthew Robinson in New York and
Sitaraman Shankar, Bate Felix and Pratima Desai in London;
Editing by Jonathan Oatis)
