Wall Street follows Europe higher, dollar rises

NEW YORK (Reuters) – US equities followed Europe on Thursday as investors took risky bets again on strong gains, and the dollar rose against the euro as statements by the head of the European Central Bank fueled fears of monetary union.

After an early sell off, oil prices stabilized as investors focused on supply and demand fundamentals again as stock markets recovered somewhat.

The greenback rose against the euro after Mario Draghi of the ECB confirmed that the asset purchase program of € 2.6 trillion will end this year and interest rates could rise after the next summer, despite the economic outlook have darkened.

While equity investors sought bargains and some of positive earnings and stronger technology stocks were calmed down, they also spoke cautiously.

"There is a sense of nervousness and caution because many people were surprised by the fall yesterday," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"It's all about feelings at this point, people are looking for things to calm down, and I think we need to see more concrete evidence."

slideshow (3 pictures)

Wall Street was replaced by reassuring results from Microsoft Corp. (MSFT.O) and strong advertising revenue from Twitter Inc (TWTR.N). Google Parent Alphabet (GOOGL.O) and Amazon.com (AMZN.O) were among the top boosters of the S & P before their later results.

The Dow Jones Industrial Average (DJI) rose 375.12 points or 1.53 percent to 24,958.54, while the S & P 500.SPX advanced 47.06 points or 1.77 percent to 2,703.16 and the Nasdaq Composite .IXIC added 196.21 points or 2.76 percent to 7,304.61.

The pan-European STOXX 600 penetrated into and out of positive territory. It rose 0.51 percent and MSCI value of shares around the world .MIWD00000PUS gained 0.70 percent.

Draghi said he was confident that the European Commission and Rome would come to a compromise on Rome's budget, but the euro returned earlier gains after saying that the currency union was fragile.

The dollar index .DXY rose 0.18 percent, the euro by 0.15 percent to 1.1374 dollars.

Monetary traders also deducted the franc CHF = and the Japanese yen JPY =. Security bonds and Italian and Spanish bonds held their ground as Draghi repeated the plans of the European Central Bank to cautiously cancel its stimulus measures.

The Japanese yen lost 0.28 percent against the greenback at $ 112.61 a dollar, while sterling GBP = was trading at 1.2823 last, 0.44 percent a day.

MSCI's broadest index for Asia-Pacific equities outside Japan. The M1APJ0000PUS closed 1.22 percent lower, while the Japanese Nikkei .N225 lost 3.72 percent.

But in China, the Shanghai SE Composite Index .SSEC managed to make a tiny profit after losing 2.8% once.

Investors also looked at mixed US economic data.

New US jobless claims rose last week, but the number of Americans receiving benefits fell to a low of more than 45 years, pointing to a worsening of labor market conditions.

But new orders for capital goods from the US fell for the second time in a row in September, and the trade deficit continued to rise in the face of rising imports, suggesting moderate economic growth in the third quarter.

Benchmark 10-year Treasuries US10YT = RR last fell 4/32 in the price 3.1375 percent, from 3.124 percent on late Wednesday.

Crude oil CLcv1 rose 1.03 percent to $ 67.51 a barrel and Brent LCOcv1 last hit $ 76.82, 0.85 percent a day.

Additional reporting by Amy Caren Daniel in Bengaluru, Kate Duiguid in New York, Marc Jones and Christopher Johnson in London, and Swati Patel in Sydney; Cut by Larry King and Nick Zieminski

Our standards:The Thomson Reuters Trust Principles.