(Repeats to more subscribers)
* Earnings hopes help lift world stocks
* Euro rebounds vs dollar on talk of ECB bond buying
* US Treasuries down ahead of bond sale
* Oil, gold rise; thermal coal hits year highs on weather
(Updates with European markets close, prices, quote)
By Manuela Badawy
NEW YORK, Jan 11 (Reuters) - Global stocks gained on
Tuesday as better-than-expected earnings lifted Wall Street
while the euro erased early losses against the dollar as talk
of the European Central Bank may buy Portuguese bonds buoyed
the single currency.
Japan said it was considering buying about 20 percent of
the bonds to be jointly issued later this month to raise funds
to support euro-zone periphery countries.
But investors remained cautious ahead of a make-or-break
debt auction in struggling Portugal on Wednesday.
The auction will signal whether the indebted country will
be able to afford to raise funds in the debt market or be
forced to take a bailout. Spain will follow suit on Thursday.
U.S. Treasury debt prices slipped on Tuesday ahead of the
auction of $66 billion in new government bonds this week, while
oil climbed above $91 a barrel as a key Alaskan pipeline
remained shut.
Gold rose for a second day on rising demand before China's
Lunar New Year in early February, while thermal coal prices
rose to a year high due to fresh flooding in Australia, a top
global exporter. []
European shares rose to a near 28-month closing high and
U.S. stocks advanced as U.S. fourth-quarter earnings exceeded
expectations with forecast-beating results from U.S. aluminum
major Alcoa <AA.N>, and higher outlooks from several
retailers.
At midday in New York, the Dow Jones industrial average
<> had climbed 59.03 points, or 0.51 percent, to 11,696.48.
The Standard & Poor's 500 Index <.SPX> gained 6.74 points, or
0.53 percent, to 1,276.49, on track to snap three straight
sessions of declines. The Nasdaq Composite Index <>
rose 13.20 points, or 0.49 percent, to 2,721.00.
"All the leading indicators are pointing towards a positive
earnings season once again," said Lothar Mentel, chief
investment officer at Octopus Investments in London, adding
that markets could push higher "as long as the positive results
are accompanied by half-decent outlooks."
Both Sears Holding Corp <SHLD.O> and Tiffany & Co <TIF.N>
raised their profit outlooks, citing strong sales.
[] and []
"Along with Alcoa, these raised outlooks suggest a
stronger-than-expected season ahead," said said Adam Sarhan,
chief executive of New York-based Sarhan Capital.
The pan-European FTSEurofirst 300 index <> of top
shares rose 1.23 percent to 1,147.15, near its highest closing
level since mid-September 2008.
World stocks as measured by MSCI <.MIWD00000PUS> shot up
0.71 percent, with emerging markets index <.MSCIEF> gaining
0.76 percent, while Japan's Nikkei closed down 0.3 percent.
Analysts said the prospect of solid corporate earnings was
generally giving stock investors the room to look past euro-
zone debt concerns for the time being.
Meanwhile, U.S. wholesale inventories unexpectedly fell 0.2
percent in November to a seasonally adjusted $425.5 billion as
wholesale sales outstripped forecasts, a government report
showed on Tuesday, suggesting optimism about the sustainability
of demand.
The stronger-than-expected sales and the fall in
inventories implied that demand during the holiday shopping
season may have been greater than retailers had anticipated.
AUCTION AHEAD
Japan pledged to buy euro-zone bonds this month in a show
of support for Europe's debt struggle but market players
doubted the gesture would offer the euro much relief.
The single currency was up 0.24 percent at $1.2972 <EUR=>
by early afternoon in New York trade amid talk of increased
Portuguese bond buying by the European Central Bank.
The premium investors demand to hold bonds issued by Spain,
Italy and Portugal, rather than low-risk German Bunds, reversed
earlier widening, with traders citing European Central Bank
bond buying.
On Wednesday, Portugal is scheduled to sell up to 1.25
billion euros of bonds in an auction that will signal whether
the indebted country will be able to afford to raise funds in
the debt market or be forced to take a bailout.
Portugal's prime minister and finance minister said on
Tuesday Portugal has no plans to seek a bailout, and the
government was doing everything possible to avoid doing so.
[]
Italy and Spain are also due to tap the bond market on
Thursday, in auctions that will also be closely watched for any
sign of contagion. []
The dollar was lower against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.01 percent at 80.873.
U.S. government bonds dropped ahead of the auctions as
dealers short Treasuries to prepare for the sale before buying
back the debt in the auctions.
The benchmark 10-year U.S. Treasury note <US10YT=RR>
fell19/32, with the yield at 3.363 percent. The 2-year U.S.
Treasury note <US2YT=RR> dipped 1/32, with the yield at 0.598
percent. The 30-year U.S. Treasury bond <US30YT=RR> slid 31/32,
with the yield at 4.525 percent.
The U.S. Treasury will sell $66 billion in new supply this
week, including $32 billion in three-year notes on Tuesday, $21
billion in re-opened 10-year notes on Wednesday, and $13
billion in re-opened 30-year bonds on Thursday.
U.S. light sweet crude oil <CLc1> rose $1.84, or 2.1
percent, to $91.09 per barrel, as the Trans Alaska Pipeline
remained shut after a leak was discovered on Saturday, removing
more than half a million barrels per day from U.S. markets and
on strong winter demand for North Sea crude.
Spot gold prices <XAU=> rose $4.70, or 0.34 percent, to
$1,379.15 an ounce as last week's price decline encouraged an
improvement in consumer demand in China ahead of the Lunar New
Year in early February, pushing premiums for gold bars to their
highest in two years.
Fresh flooding in top global exporter Australia has added a
further $10 to coal prices, driving thermal coal to a year
high. []
Prices for thermal coal, used for power generation and the
second-biggest energy source after oil, have gained more than
40 percent in the past 12 months to over $140 a tonne because
supply from every key exporter is capped. [].
Weather-related problems in Colombia, South Africa, Russia,
Indonesia, and now Australia, have caused a supply tightness
that shows little sign of abating in the near term.
[].
(Reporting and writing by Manuela Badawy; Additional reporting
by Wanfeng Zhou, Ryan Vlastelica and Karen Brettell in New
York, and Harpreet Bhal, Amanda Cooper and Jackie Cowhig in
London; Editing by Jan Paschal)
