* World stocks rise 0.9 pct on Goldman's strong profits
* Dollar down, commodities up as appetite for risk grows
* Lingering Greece concerns weigh on euro
By Walter Brandimarte
NEW YORK, April 20 (Reuters) - Stocks rose on Tuesday as
strong corporate earnings fueled optimism about the global
economy and energy shares rose as the price of crude oil gained
as some European flights resumed as the threat from Iceland's
volcanic ash receded.
The optimism over the economy reduced the safe-haven appeal
of the U.S. dollar and the Japanese yen, but the euro weakened
against the dollar on concerns Greece might need a large aid
package.
Wall Street powerhouse Goldman Sachs Group Inc <GS.N>
reported its quarterly earnings more than doubled, which
deflected attention from fraud accusations against the bank by
U.S. securities regulators. [] The Goldman results
came a day after Citigroup Inc <C.N> announced its best
quarterly results in nearly three years.
"The focus from the Goldman Sachs investigation has shifted
back to earnings, the true driver of markets," said Andre
Bakhos, director of market analytics at Lek Securities in New
York. "Optimism about this earnings season seems to be coming
back into play."
The Dow Jones industrial average <> climbed 45.95
points, or 0.41 percent, to 11,138.00, while the Standard &
Poor's 500 Index <.SPX> gained 9.88 points, or 0.83 percent, to
1,207.40. The Nasdaq Composite Index <> was up 17.50
points, or 0.71 percent, at 2,497.61.
Goldman Sachs' shares fell 1.3 percent despite its strong
results, but financial stocks overall were stronger, with the
KBW bank index rising 1.4 percent.
And energy stocks gained as crude oil futures topped $83 a
barrel, with the S&P energy index <.GSPE> up 1.7 percent.
But gains were modest as investors found some cracks in
corporate results. International Business Machines Corp <IBM.N>
reported better-than-expected profits but its gross margins
disappointed investors, and its shares fell 2.1 percent.
Coca-Cola Co <KO.N> reported mixed results, and its shares
slipped 1.7 percent.
In Europe, the FTSEurofirst 300 index <> of top
shares ended 1.4 percent higher, with automakers boosted by
above-forecast results at Daimler <DAIGn.DE> and energy
companies gaining on the stronger crude prices.
"Results have driven shares higher. After a couple of down
days Citi came out with stellar results and people started
buying again," said Mic Mills, senior trader at ETX Capital.
The MSCI world equity index <.MIWD00000PUS> gained 0.9
percent while the MSCI index of emerging market stocks
<.MSCIEF> jumped 1.3 percent as commodity prices rose.
U.S. crude oil <CLc1> leaped $1.89, or 2.32 percent, to
$83.34 per barrel, and spot gold prices <XAU=> rose 0.41
percent, to $1,139.20 an ounce. The Reuters/Jefferies CRB Index
<.CRB> of commodity futures gained 0.97 percent.
Oil investors have been studying broader financial markets,
like company shares, since last year for signs of economic
recovery that would point the way to higher fuel consumption.
"It is up because of stronger equities and lower risk
aversion. The start of European flights is at least having a
psychological impact on the marke,"" said Carsten Fritsch, a
commodities analyst at Commerzbank.
GREECE CONCERNS WEIGH ON EURO
Greater risk appetite hurt the U.S. dollar, which was
trading nearly stable against a basket of major currencies,
according to the U.S. Dollar Index <.DXY>.
Against the Japanese yen, the dollar <JPY=> was up 1
percent at 93.35 yen, a day after the yen reached a one-month
high against the greenback.
The euro <EUR=> weakened 0.33 percent to $1.344 as concerns
about the Greek fiscal situation increased.
European Central Bank Governing Council member Axel Weber
said Greece may require assistance of up to 80 billion euros to
avoid default, according to a report in the Wall Street Journal
on Tuesday. []
That amount would be far larger than the 30 billion euro
aid mechanism agreed by euro zone finance ministers earlier
this month.
Fears about Greece's finances led the premium investors
demand to buy the country's sovereign bonds to rise to fresh
highs.
The yield spread between Greek and German 10-year bonds
widened to 489 basis points, a euro lifetime wide, versus 468
basis points at Monday's settlement close, according to
Tradeweb.
Those concerns also provided some safe-haven demand for
U.S. Treasuries, although prices of U.S. debt were mostly lower
on the earnings optimism.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
down 5/32 in price, with the yield at 3.8207 percent, while the
30-year U.S. Treasury bond <US30YT=RR> was up 1/32, with the
yield at 4.6921 percent.
(Editing by Leslie Adler)
