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Markets gain as Spain dodges downgrade

Wednesday, October 17 15:52:36

Global stocks rose and the euro hit a one-month high today, helped by brighter prospects for resolving Spain's debt woes, but disappointing quarterly earnings from Intel Corp and IBM weighed on U.S. equity markets.

U.S. and German government debt prices fell after Spain avoided a damaging ratings downgrade from Moody's and stronger-than-expected U.S. housing data pointed to an improving economy, which reduced safe-haven demand.

Growing speculation that Spain will ask for a bailout next month lifted the euro. A possible line of credit to Spain and some easing of German opposition to aid for Greece and Spain were also likely to support the euro in the near term.

Wall Street opened mixed, with the Dow pulled lower by Intel and IBM. But the Nasdaq rebounded to climb higher, building on the best two-day advance for U.S. stocks in a month. Intel slumped 1.9 percent to $21.92 while IBM lost 3.8 percent to $203.05. Both were among the biggest drags on the Dow and Nasdaq 100.

"These are some fairly big disappointments, and while we think we'll see better results out of tech, it's clear the market doesn't think we'll see much growth in names like Intel or IBM," said Richard Sichel, who oversees $1.8 billion as chief investment officer at Philadelphia Trust Co.

The Dow Jones industrial average was down 5.49 points, or 0.04 percent, at 13,546.29. The Standard and Poor's 500 Index was up 5.19 points, or 0.36 percent, at 1,460.11. The Nasdaq Composite Index was up 7.29 points, or 0.24 percent, at 3,108.46.

MSCI's all-country world equity index rose 0.7 percent to 337.99, extending Tuesday's 1.2 percent gain. The FTSE Eurofirst 300 index of top European shares gained just 0.4 percent to 1,117.14. The euro was up 0.6 percent at $1.3123, its highest since mid-September.