(Recasts with U.S. markets; changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, April 30 (Reuters) - U.S. and European stocks
rallied on Wednesday and oil fell after economic data painted a
surprisingly resilient picture of the American economy.
Oil fell below $114 a barrel for the first time in almost
two weeks after a U.S. government report showed stockpiles rose
more than expected in the world's top energy consumer.
The data on gross domestic product, business activity and
employment also helped keep dollar sentiment positive by
suggesting the Federal Reserve may not have to cut interest
rates after a one-quarter-percentage-point cut expected later
Wednesday.
A halt in the Fed's rate-cutting campaign would slow the
erosion of the dollar's appeal for global investors and curb
upward pressure on dollar-denominated commodity prices.
In the United States, investors also drew comfort from a
lower-than-expected loss at General Motors Corp <GM.N> and
stronger-than-anticipated profit at consumer products maker
Procter & Gamble Co <PG.N>.
The U.S. government's first reading of first-quarter GDP
beat economists' expectations, while a survey by ADP Employer
Services showed that employers added 10,000 jobs in April, more
than had been expected.
Both reports, coming on the same day the Fed was due to
release its latest decision on interest rates, helped ease
nagging fears that the United States was in recession.
"There was nothing that scared investors as far as GDP and
the ADP reports are concerned. It was a relief, combined with
news of Procter & Gamble and other companies doing better than
expected," said Alan Lancz, president of Alan B. Lancz &
Associates Inc, an investment advisory firm, in Toledo, Ohio.
At midday, the Dow Jones industrial average <> was up
92.08 points, or 0.72 percent, at 12,924.02. The Standard &
Poor's 500 Index <.SPX> was up 3.79 points, or 0.27 percent, at
1,394.73. The Nasdaq Composite Index <> was up 11.75
points, or 0.48 percent, at 2,437.85.
General Motors Corp posted a first-quarter loss due to a
costly supplier strike, waning demand for its most profitable
vehicles and $2.2 billion in charges related to struggling
former subsidiaries. But its results beat Wall Street forecasts
and its shares jumped 13 percent.
Procter & Gamble Co posted a higher quarterly profit as
cost controls helped offset soaring prices for oil and other
commodities. Its shares rose 3.5 percent.
European shares rose, boosted by the U.S. economic data and
a raft of bullish company results, to post their best monthly
performance in 4-1/2 years.
The FTSEurofirst 300 index <> of top European shares
closed up 0.7 percent at 1,337.68 points, the fifth gain out of
the past six sessions. The index rose 6 percent in April, its
best monthly performance since October 2003.
Analysts said the rally may continue.
"Equities are decent value for the economic outlook which
I've got, which is a troublesome three to six months from now,
but we'll come through in the end and by 2009 economies should
be getting better," said Andrew Bell, a European equity
strategist at Rensburg Sheppards Investment Management.
German engineer Siemens <SIEGn.DE> was among the top
gainers, rising 3 percent after Chief Executive Peter Loescher
said he was guardedly optimistic about the year's second half.
UK gas producer BG Group Plc <BG.L> made a $12 billion bid
for Origin Energy Ltd <ORG.AX>, seeking to bolster its position
in the fast-growing Asia-Pacific gas market by securing the
Australian utility's gas reserves.
BG's offer was a 40 percent premium to Origin's close on
Tuesday; Origin shares jumped 33 percent. Shares of BG, one of
the largest shippers of liquefied natural gas and the biggest
importer of LNG into the United States last year, fell 4.7
percent.
Oil prices fell. U.S. crude stocks increased by 3.8 million
barrels, the Energy Information Administration said, far more
than the 300,000-barrel increase analysts expected in a Reuters
poll.
"Generally it's a bearish number, particularly on the crude
oil side with a larger-than-expected build," said Eric
Wittenauer, an analyst at Wachovia Securities in St. Louis.
U.S. light sweet crude oil <CLc1> fell $1.73, or 1.5
percent, to $113.90 per barrel.
The dollar was on track for its largest monthly gain in
four years against the yen, while the euro was poised for its
largest monthly decline against the dollar since May 2007.
The dollar was down against major trading-partner
currencies, with the U.S. Dollar Index <.DXY> off 0.06 percent
at 72.817. The euro <EUR=> was up 0.02 percent at $1.557.
Against the yen, the dollar <JPY=> was up 0.32 percent.
U.S. Treasury debt prices were mixed. The benchmark 10-year
U.S. Treasury note <US10YT=RR> was unchanged to yield 3.83
percent. The 2-year U.S. Treasury note <US2YT=RR> fell 2/32 to
yield 2.38 percent. The 30-year U.S. Treasury bond <US30YT=RR>
was unchanged to yield 4.56 percent.
Gold bounced from a three-month low on Wednesday but
remained under pressure as investors avoided big bets ahead of
a key U.S. rate decision by the Federal Reserve later in the
day.
Spot gold prices <XAU=> fell $3.15, or 0.36 percent, to
$866.90.
Copper prices, however, recouped earlier losses on
Wednesday after slightly better-than-expected data on economic
growth in the United States.
Asian bourses closed mixed to lower. Tokyo's Nikkei 225
<> shed 0.3 percent and Hong Kong's Hang Seng <> fell
0.6 percent. China's main Shanghai index <> bucked the
trend and jumped 4.8 percent.
(Additional reporting by Ellis Mnyandu, Chris Reese and
Gertrude Chavez-Dreyfuss in New York, and Alex Lawler in
London; Editing by Jonathan Oatis)
