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GLOBAL MARKETS-Stocks approach new highs on positive earnings, economic data

Published 17/04/2019, 01:25 am
© Reuters.  GLOBAL MARKETS-Stocks approach new highs on positive earnings, economic data
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* Strong healthcare results, forecasts lift Wall Street

* European shares at 6-month high, volatility lowest in 15 months

* Sterling slips on report of stalled Brexit talks

* Oil price rally takes a breather on supply concerns

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Updates to open of U.S. markets, changes dateline; previous LONDON)

By April Joyner

NEW YORK, April 16 (Reuters) - Stocks around the globe rose on Tuesday to six-month highs after U.S. healthcare companies posted strong earnings and data provided reassurance about economic sentiment in Germany.

Wall Street's S&P 500 .SPX edged higher after Johnson & Johnson (NYSE:JNJ) JNJ.N beat quarterly profit estimates and raised its sales growth forecast for the year. UnitedHealth Group Inc (NYSE:UNH) UNH.H also beat earnings estimates and increased its adjusted earnings target, though its shares reversed course to trade lower.

"UnitedHealth and Johnson & Johnson raising their forecast is a hugely good thing as heading into the year we thought we might see an earnings pause or an earnings recession," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

In Europe, Germany's DAX .GDAXI rose 0.7% after the monthly ZEW survey showed the mood improved among German investors for the sixth consecutive month. Britain's FTSE 100 .FTSE also strengthened. pan-European STOXX 600 .STOXX index topped its strongest since October, and the MSCI world equity index .MIWD00000PUS also rose to a six-month high.

The latest leg higher in this year's global rally comes as a degree of calm has descended across financial markets. European stock volatility .V2TX reached its lowest level since January 2018, while on Wall Street, the CBOE Volatility Index .VIX hit its lowest level in more than six months.

The rally in equities was tempered, however, by a Reuters report in which European Central Bank sources expressed doubt about a projected euro zone growth rebound. the strong rally we have seen in equities, people are now waiting for the next catalyst," said Natixis Cross Asset Strategist Florent Pochon. "We do expect some more positive data from Europe, which should give a bit of fresh air (to European assets)."

The U.S.-China trade dispute, signs of slowing global corporate earnings and fears about an economic downturn have weighed on riskier assets in the past year. But investors have been quick to seize on positive news to keep the bull market running.

Among the information investors are anticipating is Chinese quarterly economic growth data, due on Wednesday. After a worrying start to the year, Chinese numbers have been more positive as authorities ramped up stimulus measures, soothing investor fears about a slowdown in the world's second-biggest economy.

By late morning, the Dow Jones Industrial Average .DJI rose 49.41 points, or 0.19%, to 26,434.18, the S&P 500 .SPX gained 5.32 points, or 0.18%, to 2,910.9 and the Nasdaq Composite .IXIC added 31.44 points, or 0.39%, to 8,007.46.

The pan-European STOXX 600 index .STOXX rose 0.28% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.24%.

As stocks advanced, U.S. Treasury yields rose to four-week highs. Benchmark 10-year notes US10YT=RR last fell 9/32 in price to yield 2.5832%, from 2.553% late on Monday. gold prices XAU= dropped to their lowest level this year and were last down 1.0% as risk appetite dented demand for the precious metal's safe-haven credentials. currency markets, sterling slipped 0.4% after the Guardian newspaper reported that talks between Prime Minister Theresa May and the opposition Labor Party regarding Britain's exit from the European Union had stalled. The Labor Party denied the report. euro EUR= dipped after the Reuters report on ECB sources questioning forecasts for an economic rebound. The currency later recovered to $1.13, down marginally.

The dollar index .DXY was little changed.

After a rally to five-month highs on tightening global supplies, crude oil paused on the prospect of Russia and OPEC boosting production to fight for market share with the United States. crude LCOc1 futures lost 2 cents to $71.16 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 12 cents to $63.52 a barrel.

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