NEW YORK, June 9 (Reuters) – World stocks jumped about 1 percent and oil prices surged on Wednesday as comments by Federal Reserve Chairman Ben Bernanke and unofficial data on Chinese exports raised hopes that a global economic recovery is on sure footing.
The euro rose from multi-year lows for a second straight day, boosted by renewed optimism that Europe’s debt crisis will not put the brakes on global growth, and as traders continued to book profits following the currency’s slide.
The keener appetite for risk drove crude oil prices up 4 percent above $74 a barrel, as U.S. data that showed a hefty drawdown in crude oil inventories added to the picture of rising demand.
Chinese exports grew 50 percent in May from a year earlier, according to sources, well above expectations for growth of 32 percent. The unofficial data was seen as a sign that the economy of the world’s second-largest oil user was roaring ahead. China is to report the official export data on Thursday as part of broader trade data. [ID:nBJD003776]
Bernanke, in testimony to the U.S. House of Representatives Budget Committee, said the economic recovery appeared to be on solid footing and that while a double-dip recession “can never be entirely ruled out,” he expects the economy to continue growing. [ID:nWAL9HE68B]
“Bernanke is more positive about the economy than the consensus is, at a time when some people are starting to question whether we could get a double dip,” said Carl Birkelbach, chairman of Birkelbach Investment Securities in Chicago.
The three major U.S. stock indexes all rose more than 1 percent, and European shares snapped a three-day losing streak to close up 1.85 percent.
The Dow Jones industrial average .DJI was up 108.68 points, or 1.09 percent, at 10,048.66. The Standard & Poor’s 500 Index .SPX was up 12.74 points, or 1.20 percent, at 1,074.74. The Nasdaq Composite Index .IXIC was up 29.53 points, or 1.36 percent, at 2,200.10.
Tech lifted the Nasdaq after Texas Instruments Inc (TXN.N) said second-quarter earnings and revenue would be at the high end of its forecast on strong broad-based demand, particularly from industrial customers. [ID:nN08218836]
The stock gained 1.7 percent to $24.28 while the PHLX Semiconductor index .SOXX rose 2.2 percent.
The MSCI’s all-country world stock index .MIWD00000PUS rose 1.3 percent.
The pan-European FTSEurofirst 300 .FTEU3 index closed up 18.09 points at 998.44 points.
“It’s a relief rally. I think we’re due a technical recovery,” said Giuseppe-Guido Amato, strategist at Lang & Schwarz.
“Whether it’s a one-day wonder we don’t know. The only sure thing is high volatility. Q1 earnings were good, and Q2 may be good, but macro trumps micro now. The acceleration of the recovery is fading. There is a chance of a double dip.”
The China data, as well as a weaker dollar, helped oil and and metal prices gain, boosting commodity shares. Among gainers were miners Anglo American (AAL.L), BHP Billiton (BLT.L), Fresnillo (FRES.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) and energy shares Total (TOTF.PA), Repsol (REP.MC) and StatoilHydro (STL.OL) .
BP (BP.L), however, fell 4.3 percent to its lowest close since since October 2008 as traders cited concern over its dividend payment. The company is coming under increasing pressure from U.S. politicians following an oil spill in the Gulf of Mexico.
BP is down more than 40 percent from a mid- April peak, wiping about 50 billion pounds ($72 billion) off its market capitalization.
The euro rose against the dollar for a second straight session, boosted by options-related demand and renewed market hopes that Europe’s debt crisis may not put the brakes on global growth.
The euro EUR= was up 0.57 percent at $1.204, after falling below $1.19 on Monday, its weakest since 2006. The euro has shed nearly 16 percent against the dollar so far this year.
Few were ready, however, to declare the currency’s woes over. Banks’ overnight deposits at the European Central Bank hit a record on Wednesday, highlighting widespread worries about the health of the financial system. [ID:nLDE6580FO]
Steven Butler, head of FX trading at Scotia Capital, said that while the euro in the short term could reach $1.2110, “I still think there’s downside.”
“And overall, this move over the past few months has seen new lows hit, then consolidation and a nasty bounce back before we make another assault downward,” he added.
Traders said option expiries at $1.1900 and $1.1850 added to euro demand as investors bought the currency to protect their positions.
Investors were also awaiting a European Central Bank policy meeting on Thursday to see if the ECB will announce fresh steps to ease strains from the euro zone’s debt crisis. [ID:nLDE6560K2]
The ECB is also expected to publish a new set of economic forecasts for the region that are likely to signal somewhat stronger activity, despite worries that debt problems and government austerity measures will sharply brake growth.
U.S. Treasuries fell slightly before the second installment of this week’s $70 billion worth of bond auctions.
After Tuesday’s well-received offering of three-year debt, the U.S. Treasury will sell $21 billion worth of 10-year notes at 1 p.m. (1700 GMT). Dealers usually sell ahead of offerings to clear room on balance sheets and make prices more attractive at auction.
The benchmark 10-year U.S. Treasury note US10YT=RR was down 13/32, with the yield at 3.2367 percent. The 2-year U.S. Treasury note US2YT=RR was down 2/32, with the yield at 0.766 percent. The 30-year U.S. Treasury bond US30YT=RR was down 29/32, with the yield at 4.1655 percent.
Crude oil CLc1 rose $2.69, or 3.74 percent, to $74.68 per barrel.
Risk-averse investors have streamed into gold, sending prices for the precious metal to a record high in U.S. dollars, on persistent fears that the euro zone debt problems will spread. (Additional reporting by Steven C. Johnson, Ryan Vlastelica and Burton Frierson in New York and Brian Gorman in London)