* Euro climbs for second day on Greek rescue optimism
* Risk premiums fall as investors sense Greek deal
* Oil rises toward $85 a barrel as Greek debt woes ease
* Global stocks rise as risk appetite returns to markets
(Updates with closing of U.S. markets)
By Herbert Lash
NEW YORK, April 29 (Reuters) - Global markets staged a
relief rally on Thursday as Greece's move to enact severe
austerity measures to secure an aid package eased fears that
the debt crisis will spread across Europe, boosting the euro
and fueling the biggest jump in equities since early March.
Risk premiums eased and oil prices rose above $85 a barrel
as a potential resolution of Greece's persistent debt problems
appeared within grasp. Officials from the European Union,
European Central Bank and International Monetary Fund were in
Athens to negotiate the bailout and wrap up a deal within
days.
Another dose of strong corporate results and further signs
of economic recovery lifted global equities more than 1 percent
after two days of losses. Oil rallied to a two-week high.
MSCI's all-country world index of stocks <.MIWD00000PUS>
rose 1.2 percent in the biggest single-day percentage gain
since March 5. Major U.S. indices also rose the most since
then, while the Nasdaq posted its biggest jump since Jan. 4.
"At least for today we have had some respite from this
whole fear thing of the contagion of sovereign debt," said Dan
Cook, senior market analyst at IG Markets in Chicago.
Uncertainty over the size and timing of an aid package for
Greece has weighed on markets for weeks. Concerns of spreading
sovereign credit risk jumped this week when Standard & Poor's
slashed Greece's ratings to junk status.
S&P also downgraded Portugal on Tuesday and on Wednesday
cut Spain's rating one notch, sparking the latest bout of
investor fear that Greece could default on its debt.
[]
The euro rose for a second day, gaining 0.3 percent at
$1.3244 <EUR=> after earlier rising as high as $1.3280,
according to Reuters data. []
"The market sees a bigger package for Greece, covering
three years, as a bigger backstop," said Kenneth Broux, market
economist at Lloyds Banking Group in London. "This is helping
to address some investor fears and giving some support for the
euro."
German politicians have said aid to Greece could be worth
100-120 billion euros ($133-160 billion) over three years,
against an original plan for 45 billion euros of aid in 2010.
A string of better-than-expected earnings reports drove
Wall Street higher, led by Motorola Inc <MOT.N>, Visa Inc <V.N>
and Aetna Inc <AET.N>, among others.
The Dow Jones industrial average <> gained 122.05
points, or 1.10 percent, to 11,167.32. The Standard & Poor's
500 Index <.SPX> rose 15.42 points, or 1.29 percent, to
1,206.78. The Nasdaq Composite Index <> added 40.19
points, or 1.63 percent, to 2,511.92.
The Federal Reserve's positive view of the U.S. economy on
Wednesday added to improved sentiment. []
A better-than-expected rise in euro zone economic sentiment
in April, which could boost consumer spending and consumption,
also boosted investors' appetite for risk. []
In the United States, data showing the number of U.S.
workers submitting new claims for unemployment benefits fell
slightly last week drew mixed views, as it implied only a
gradual labor market improvement.
Crude for June delivery <CLMO> settled up $1.95, or 2.3
percent, at $85.17 a barrel. In London, the ICE Brent June
crude <LCOc1> ended 74 cents higher, or 0.86 percent, at
$86.90.
Long-dated U.S. Treasuries edged up to session highs after
strong demand for a 7-year note sale ended a week of record
issuance on a solid note. []
The auction of $32 billion of seven-year notes was the
fourth and final of this week's $129 billion worth of
coupon-paying securities, all of which overcame market
uncertainty amid a Fed meeting and euro zone fiscal crisis.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
9/32 in price to yield 3.73 percent.
Gold prices were largely flat after reaching near
five-month highs in the previous session as a flight to safety
fizzled.
U.S. gold futures for June delivery <GCM0> settled down $3
at $1,168.80 an ounce in New York.
Copper prices slid to their lowest levels in 1-1/2-months
in New York on concerns about near-term demand deterioration in
China.
The MSCI index of Asian stocks outside of Japan
<.MIAPJ0000PUS> was off 0.1 percent, while Japanese markets
were closed for the start of the country's long Golden Week
holiday.
(Reporting by Edward Krudy, Vivianne Rodrigues, Ellen Freilich
in New York; George Matlock, Emma Farge in London; Blaise
Robinson in Paris; Writing by Herbert Lash; Editing by Dan
Grebler)
