Greek rescue deal does not undermine euro – Juncker

BERLIN, April 12 (Reuters) – The euro zone’s rescue plan for debt-stricken Greece does not undermine the European single currency, Jean-Claude Juncker, chairman of the Eurogroup of finance ministers, said on Monday.

Asked by Deutschlandfunk German radio whether the 30 billion euro emergency aid mechanism breached the European Union treaty, thereby weakening the euro, Juncker said:

“My response is that this is not the case. We’re putting something together that will ensure the euro area does not fragment.”

Together with at least 10 billion euros expected from the International Monetary Fund in the first year, the aid package for Greece could add up to the biggest multilateral financial rescue ever attempted, if put into action. (Writing by Dave Graham; Editing by Tomasz Janowski)

Europe stock futures signal gains after Greek deal

PARIS, April 12 (Reuters) – European stock index futures pointed to a higher open on Monday after euro zone finance ministers approved an aid plan for debt-stricken Greece.

Stocks | Global Markets

At 0601 GMT, futures for the STOXX Europe 50 STXEc1, for Germany’s DAX FDXc1 and for France’s CAC FCEc1 were up 0.6-0.7 percent.

Euro zone finance ministers approved a 30 billion euros ($40 billion) emergency aid mechanism for Greece on Sunday, but stressed Athens had not requested the plan be activated yet. [ID:nLDE63A0BO]

(Reporting by Blaise Robinson)

UK Stocks — Factors to watch on April 12

LONDON, April 12 (Reuters) – Britain’s FTSE 100 .FTSE index is seen
opening up 21-24 points, or 0.4 percent on Monday, according to financial
bookmakers, extending Friday’s strong recovery in tandem with overnight gains in
Asia as a rescue plan for debt-laden Greece was put in place.

The UK blue chip index closed 58.28 points, or 1.0 percent higher on Friday
at 5,770.98, recovering all of a 0.9 fall on Thursday which had been the biggest
single-day decline for six weeks.

Asian stocks hit 22-month highs on Monday after a giant emergency aid plan
for Greece boosted demand for riskier assets across the board.

In what may be the biggest multilateral financial rescue ever, the euro zone
and the IMF threw debt-laden Greece a lifeline over the weekend by pledging at
least 30 billion euros ($40 billion) in aid, though Athens has yet to activate
it. [ID:nLDE63A0BO]

Commodity issues are expected to lead the gainers on Monday as metal prices
rose and crude CLc1 pushed above $85 a barrel, buoyed by a drop in the U.S.
dollar and bullish data that showed Chinese crude imports jumping to their
second-highest monthly level in March. [ID:nSGE63901H]

On the domestic macro front, no important data is due for release on Monday,
with little scheduled all week, though investors will look to the March RICS
house price survey for some clues as to the state of the British economy, with
that report due for release at 2301 GMT on Monday night.

Investors will also look ahead to the March U.S. Federal budget numbers,
also due after the London close at 1800 GMT.

U.S. first-quarter earnings will also be a focus over the next few weeks,
with the traditional curtain-raiser coming on Monday from aluminium group Alcoa
(AA.N), while banking giants JP Morgan Chase (JPM.N), Goldman Sachs (GS.N), and
Bank of America (BAC.N) report numbers later in the week.

* GLOBAL MARKETS-Euro surges on Greek aid, stocks climb [ID:nSGE63A036]

* US STOCKS-Wall St up with energy sector, Dow hits 11,000 [ID:nN09139071]

* Nikkei rises 1 pct; Dentsu up on earnings estimate [ID:nTOE63B02Q]

* FOREX-Euro jumps on Greek package in short squeeze [ID:nTOE63B03E]

* TREASURIES-Dip in Asia on Greek aid; data, earnings eyed [ID:nTOE63B041]

* Oil rises above $85 on weak dollar, China data [ID:nSGE63B06G]

* METALS-LME copper hits new 20-month high on weak dlr [ID:nSGE63B04U]

* PRECIOUS-Gold hits 4-mth high on euro, investor demand [ID:nTOE63B03U]

UK stocks to watch on Monday are:

LLOYDS BANKING GROUP (LLOY.L)

The bank is holding discreet talks with various stockbroking firms,
including Numis Securities, Evolution (EVG.L), and Execution Nobel on setting up
a joint venture which would cement its presence in equity capital markets, The
Sunday Times said.

BARCLAYS (BARC.L)

Lehman Brothers Holdings Inc (LEHMQ.PK) told a U.S. bankruptcy judge on
Friday that Barclays should be forced to return certain assets it received in
its 2008 acquisition of Lehman’s core U.S. brokerage, because Barclays arranged
a secret $5 billion discount. [ID:nN09256273]

BANKS

Australian bank National Australia Bank’s 1.5 billion pound bid for 318 high
street branches being sold by British bank Royal Bank of Scotland (RBS.L) may
require NAB to raise additional capital in the UK, the Daily Telegraph said on
Monday.

BG GROUP (BG.L)

The gas producer is retreating from the UK power sector and has put its
power plants up for sale, according to a report in the Sunday Times.
[ID:nLDE63A0IB]

VODAFONE (VOD.L)

The mobile telecoms firm is to consult shareholders on the options for U.S.
Verizon Wireless, its joint venture with American partner Verizon
Communications, The Sunday Telegraph said.

BHP BILLITON (BLT.L)

The global miner has suspended operations at part of its Nickel West mining
complex in west Australia after a miner died in an accident there at the
weekend, the firm said on Monday. [ID:nSYU009699]

XSTRATA (XTA.L)

Shares in Australia’s Macarthur, the world’s biggest exporter of a
cleaner-burning coal known as PCI, surged as much as 10 percent on Monday –
their highest since mid-July 2008 — as investors latched on to media reports
that Xstrata would bid more than $3.7 billion for the firm. [ID:nSGE63A02X]

ANGLO AMERICAN (AAL.L)

The state-run China Metallurgical Corporation is among the bidders for the
800 million dollar zinc assets of Anglo American (AAL.L), the Independent on
Sunday said.

CENTRICA (CNA.L)

Centrica is to enter the shale gas business as it looks to double the size
of Direct Energy, its North American operation, to a turnover of 12.2 billion
pounds within five years, The Mail on Sunday said.

BAE SYSTEMS (BAES.L)

BAE has topped a list of the world’s 100 largest arms manufacturers,
compiled by the Stockholm International Peace Research Institute, marking the
first time that the list has been topped by a company outside the U.S., The
Guardian said on Monday.

PEARSON (PSON.L)

Parties interested in Interactive Data Corporation (IDC), the financial data
group controlled by Pearson, are preparing second-round bids before an expected
late-April deadline, the Financial Times said on Monday.

AIRLINES

Richard Branson, the founder of the Virgin Atlantic airline has hit out at
competition authorities over the “lazy” and “misguided” way they are treating a
proposed alliance between American Airlines and British Airways (BAY.L) in an
interview in the Financial Times on Monday.

QINETIQ (QQ.L)

Two U.S. private equity funds have taken stakes in the defence technology
firm, underlying hopes of a significant shake-up of the group under new CEO Leo
Quinn, according to a report in the Sunday Times. [ID:nLDE63A0HM]

ITV (ITV.L)

The broadcaster’s new chief executive, Adam Crozier, is seeking out
potential programme makers to head the broadcaster’s production arm ITV Studios,
The Sunday Times said.

DEBENHAMS (DEB.L)

The department store chain is to release a six-month trading update on
Tuesday that is predicted to report a 14.3 million pound increase in pre-tax
profits to 116 million pounds, The Independent on Sunday said.

JJB BOSS SPORTS (JJB.L)

The sportswear chain has surprised the sportswear industry by putting its
stock orders on hold only two months before a period of expected high demand
during the World Cup in June, The Mail on Sunday said.

CARR’S MILLING (CARS.L)

The agriculture, food and engineering group reports first-half results.

VERNALIS (VER.L)

The biotech firm posts full-year results.

E2V TECHNOLOGIES (E2V.L)

The electronic components maker issues a trading update.

(Reporting by Jon Hopkins; Editing by Mike Nesbit)

Europe stock futures signal gains after Greek deal

PARIS, April 12 (Reuters) – European stock index futures pointed to a higher open on Monday after euro zone finance ministers approved an aid plan for debt-stricken Greece.

Stocks | Global Markets

At 0601 GMT, futures for the STOXX Europe 50 STXEc1, for Germany’s DAX FDXc1 and for France’s CAC FCEc1 were up 0.6-0.7 percent.

Euro zone finance ministers approved a 30 billion euros ($40 billion) emergency aid mechanism for Greece on Sunday, but stressed Athens had not requested the plan be activated yet. [ID:nLDE63A0BO]

(Reporting by Blaise Robinson)

UK Stocks — Factors to watch on April 12

LONDON, April 12 (Reuters) – Britain’s FTSE 100 .FTSE index is seen
opening up 21-24 points, or 0.4 percent on Monday, according to financial
bookmakers, extending Friday’s strong recovery in tandem with overnight gains in
Asia as a rescue plan for debt-laden Greece was put in place.

The UK blue chip index closed 58.28 points, or 1.0 percent higher on Friday
at 5,770.98, recovering all of a 0.9 fall on Thursday which had been the biggest
single-day decline for six weeks.

Asian stocks hit 22-month highs on Monday after a giant emergency aid plan
for Greece boosted demand for riskier assets across the board.

In what may be the biggest multilateral financial rescue ever, the euro zone
and the IMF threw debt-laden Greece a lifeline over the weekend by pledging at
least 30 billion euros ($40 billion) in aid, though Athens has yet to activate
it. [ID:nLDE63A0BO]

Commodity issues are expected to lead the gainers on Monday as metal prices
rose and crude CLc1 pushed above $85 a barrel, buoyed by a drop in the U.S.
dollar and bullish data that showed Chinese crude imports jumping to their
second-highest monthly level in March. [ID:nSGE63901H]

On the domestic macro front, no important data is due for release on Monday,
with little scheduled all week, though investors will look to the March RICS
house price survey for some clues as to the state of the British economy, with
that report due for release at 2301 GMT on Monday night.

Investors will also look ahead to the March U.S. Federal budget numbers,
also due after the London close at 1800 GMT.

U.S. first-quarter earnings will also be a focus over the next few weeks,
with the traditional curtain-raiser coming on Monday from aluminium group Alcoa
(AA.N), while banking giants JP Morgan Chase (JPM.N), Goldman Sachs (GS.N), and
Bank of America (BAC.N) report numbers later in the week.

* GLOBAL MARKETS-Euro surges on Greek aid, stocks climb [ID:nSGE63A036]

* US STOCKS-Wall St up with energy sector, Dow hits 11,000 [ID:nN09139071]

* Nikkei rises 1 pct; Dentsu up on earnings estimate [ID:nTOE63B02Q]

* FOREX-Euro jumps on Greek package in short squeeze [ID:nTOE63B03E]

* TREASURIES-Dip in Asia on Greek aid; data, earnings eyed [ID:nTOE63B041]

* Oil rises above $85 on weak dollar, China data [ID:nSGE63B06G]

* METALS-LME copper hits new 20-month high on weak dlr [ID:nSGE63B04U]

* PRECIOUS-Gold hits 4-mth high on euro, investor demand [ID:nTOE63B03U]

UK stocks to watch on Monday are:

LLOYDS BANKING GROUP (LLOY.L)

The bank is holding discreet talks with various stockbroking firms,
including Numis Securities, Evolution (EVG.L), and Execution Nobel on setting up
a joint venture which would cement its presence in equity capital markets, The
Sunday Times said.

BARCLAYS (BARC.L)

Lehman Brothers Holdings Inc (LEHMQ.PK) told a U.S. bankruptcy judge on
Friday that Barclays should be forced to return certain assets it received in
its 2008 acquisition of Lehman’s core U.S. brokerage, because Barclays arranged
a secret $5 billion discount. [ID:nN09256273]

BANKS

Australian bank National Australia Bank’s 1.5 billion pound bid for 318 high
street branches being sold by British bank Royal Bank of Scotland (RBS.L) may
require NAB to raise additional capital in the UK, the Daily Telegraph said on
Monday.

BG GROUP (BG.L)

The gas producer is retreating from the UK power sector and has put its
power plants up for sale, according to a report in the Sunday Times.
[ID:nLDE63A0IB]

VODAFONE (VOD.L)

The mobile telecoms firm is to consult shareholders on the options for U.S.
Verizon Wireless, its joint venture with American partner Verizon
Communications, The Sunday Telegraph said.

BHP BILLITON (BLT.L)

The global miner has suspended operations at part of its Nickel West mining
complex in west Australia after a miner died in an accident there at the
weekend, the firm said on Monday. [ID:nSYU009699]

XSTRATA (XTA.L)

Shares in Australia’s Macarthur, the world’s biggest exporter of a
cleaner-burning coal known as PCI, surged as much as 10 percent on Monday –
their highest since mid-July 2008 — as investors latched on to media reports
that Xstrata would bid more than $3.7 billion for the firm. [ID:nSGE63A02X]

ANGLO AMERICAN (AAL.L)

The state-run China Metallurgical Corporation is among the bidders for the
800 million dollar zinc assets of Anglo American (AAL.L), the Independent on
Sunday said.

CENTRICA (CNA.L)

Centrica is to enter the shale gas business as it looks to double the size
of Direct Energy, its North American operation, to a turnover of 12.2 billion
pounds within five years, The Mail on Sunday said.

BAE SYSTEMS (BAES.L)

BAE has topped a list of the world’s 100 largest arms manufacturers,
compiled by the Stockholm International Peace Research Institute, marking the
first time that the list has been topped by a company outside the U.S., The
Guardian said on Monday.

PEARSON (PSON.L)

Parties interested in Interactive Data Corporation (IDC), the financial data
group controlled by Pearson, are preparing second-round bids before an expected
late-April deadline, the Financial Times said on Monday.

AIRLINES

Richard Branson, the founder of the Virgin Atlantic airline has hit out at
competition authorities over the “lazy” and “misguided” way they are treating a
proposed alliance between American Airlines and British Airways (BAY.L) in an
interview in the Financial Times on Monday.

QINETIQ (QQ.L)

Two U.S. private equity funds have taken stakes in the defence technology
firm, underlying hopes of a significant shake-up of the group under new CEO Leo
Quinn, according to a report in the Sunday Times. [ID:nLDE63A0HM]

ITV (ITV.L)

The broadcaster’s new chief executive, Adam Crozier, is seeking out
potential programme makers to head the broadcaster’s production arm ITV Studios,
The Sunday Times said.

DEBENHAMS (DEB.L)

The department store chain is to release a six-month trading update on
Tuesday that is predicted to report a 14.3 million pound increase in pre-tax
profits to 116 million pounds, The Independent on Sunday said.

JJB BOSS SPORTS (JJB.L)

The sportswear chain has surprised the sportswear industry by putting its
stock orders on hold only two months before a period of expected high demand
during the World Cup in June, The Mail on Sunday said.

CARR’S MILLING (CARS.L)

The agriculture, food and engineering group reports first-half results.

VERNALIS (VER.L)

The biotech firm posts full-year results.

E2V TECHNOLOGIES (E2V.L)

The electronic components maker issues a trading update.

(Reporting by Jon Hopkins; Editing by Mike Nesbit)

HK stocks at 3-month high, China property shares weak

HONG KONG/SHANGHAI, April 12 (Reuters) – Hong Kong stocks
rose 0.16 percent by midday on Monday to a three-month high as
a giant emergency aid plan for Greece helped boost shares of
Europe’s biggest bank HSBC (0005.HK).

China’s main stock index lost 0.57 percent by midday on
Monday, pressured by a tumble in the property sector after the
country’s top banking regulator ordered banks to take fresh
steps to rein in risky lending to land developers.
[ID:nSGE63B00N]

In Hong Kong, the benchmark Hang Seng Index .HSI gained
34 points to 22,243. The China Enterprise Index .HSCE of top
locally listed mainland stocks was down 0.19 percent.

Market turnover stood at HK$39.9 billion ($5.2 billion)
from midday Friday’s HK$42.65 billion.

“The Greek rescue plan will help HSBC, which still has many
operations in Europe,” said Francis Lun, general manager at
Fulbright Securities. “The U.S. is also showing further signs
of a recovery, so that’s helping sentiment, although I expect
profit taking pressure to come on soon.”

The Hang Seng’s relative strength index (RSI) treaded close
to the overbought level of 70 for the first time in over eight
months, raising concern that the index may not remain above the
22,000 that investors consider a strong resistance.

The IMF and the euro zone threw debt-laden Greece a
lifeline over the weekend by pledging at least 40 billion euros
($54 billion) in aid, although Athens has yet to activate it.
[ID:nLDE63A0BO]

HSBC was the morning’s biggest positive influence on the
big board, adding some 31 points to the Hang Seng Index. Shares
of the market heavyweight were up 0.98 percent to a one-month
intraday high.

A slew of Chinese economic data due later this week could
support the case for a global economic rebound, helping boost
Chinese plays such as ICBC (1398.HK) and Bank of China
(3988.HK).

“Chinese banks still look cheap compared to their peaks,”
said Fulbright’s Lun, who estimates an average upside of about
10 percent for most Chinese banks. “Right now, most are trading
at a book value of about two times, which is about reasonable.”

SHANGHAI SLIPS ON PROPERTY WOES

The Shanghai Composite Index .SSEC was down 0.76 percent
at 3121.55, extending last week’s modest 0.4 percent drop amid
continuing signs that the authorities are clamping down on
asset prices, in particular property prices.

The Shanghai property index .SSEP slumped 2.80 percent.

Real estate companies, prominent among the market’s large
caps, fuelled a 0.87 percent drop in the CSI300 Index
.CSI300, which covers the 300 largest companies by daily
turnover and market capitalisation on the Shanghai and Shenzhen
stock exchanges.

Top housing builder China State Construction Engineering Co
(601668.SS) was the Shanghai market’s most actively traded
stock, dropping 0.93 percent. The second-biggest builder, China
Vanke (000002.SZ), was Shenzhen’s most active stock, falling
2.02 percent.

“Few investors expect they can make profits in property
counters in the near term, and many simply exited the sector,”
said a Chinese fund manager based in Shenzhen, who could not be
quoted by name as he was not authorised to talk to the media
about stocks.

Despite the morning’s fall, traders said the index was
still likely to move around the key 125-day moving average, now
at 3,119 points, and to continue a general trend of range-bound
trading seen so far this year as the market is supported by
China’s strong economy and subsequent robust corporate
earnings.

Bucking the market’s downtrend, paper producer Zhejiang Kan
Specialities Material Co 002012.SZ surged to its 10 percent
daily limit to become the top gainer after it forecast a
sevenfold increase in first-quarter earnings.

Monday morning’s Shanghai A-share turnover jumped to 91
billion yuan ($13 billion) from Friday morning’s 66 billion as
a divided market sparked lots to-and-fro trading. Falling
Shanghai stocks outnumbered fallers by 465 to 408.

Small-cap real estate firm Sunshine City Group Co
000671.SZ was the morning’s biggest laggard, plunging 7.01
percent in line with overall weakness in the sector

Europe Factors-Shares seen up after Greece aid deal

PARIS, April 12 (Reuters) – Financial bookmakers expected to see the leading
European benchmark indexes rally on Monday, extending the previous session’s
sharp gains, after euro zone finance ministers approved an aid plan for
debt-stricken Greece.

Financial spreadbetters expected Britain’s FTSE 100 .FTSE to open 21 to 24
points higher, or as much as 0.4 percent, Germany’s DAX .GDAXI to open 24 to
25 points higher, or as much as 0.4 percent, and France’s CAC-40 .FCHI to open
10 to 13 points higher, or as much as 0.3 percent.

Euro zone finance ministers approved a 30 billion euros ($40 billion)
emergency aid mechanism for Greece on Sunday, but stressed Athens had not
requested the plan be activated yet. [ID:nLDE63A0BO]

The deal sent the euro leaping to its highest level in nearly a month on
Monday, surging 1 percent on the dollar and yen.

———————-MARKET SNAPSHOT AT 0506 GMT———————-

LAST PCT CHG NET CHG

S&P 500 .SPX 1,194.37 0.67 % 7.93

NIKKEI .N225 11,301.39 0.87 % 97.05

MSCI ASIA EX-JP .MIASJ0000PUS 507.22 -0.15 % -0.78

EUR/USD EUR= 1.3677 0.40 % 0.0055

USD/JPY JPY= 93.09 -0.12 % -0.1100

10-YR US TSY YLD US10YT=RR 3.914 — 0.03

10-YR BUND YLD EU10YT=RR 3.168 — 0.00

SPOT GOLD XAU= $1,165.20 0.53 % $6.20

US CRUDE CLc1 $85.31 0.46 % 0.40

———————————————————————–

Wall St climbs with energy sector, Dow touches 11,000 [ID:nN09139071]

GLOBAL MARKETS-Euro surges on Greek aid, stocks climb [ID:nSGE63A036]

Nikkei rises 1 pct; Dentsu up on earnings estimate [ID:nTOE63B02Q]
Euro jumps on Greek package in short squeeze [ID:nTOE63B03E]

Oil rises above $85 on weak dollar, China data [ID:nSGE63B06G]

LME copper hits new 20-month high on weak dlr [ID:nSGE63B04U]

Gold hits 4-mth high on euro jump, investment demand [ID:nTOE63B03U]

TREASURIES-Dip in Asia on Greek aid; data, [ID:nTOE63B041]

(Reporting by Blaise Robinson; Editing by Mike Nesbit)

Bookies see Europe stocks up after EU deal on Greece

PARIS, April 12 (Reuters) – Financial bookmakers expected to see the leading European benchmark indexes rally on Monday, extending the previous session’s sharp gains, after Euro zone finance ministers approved an aid plan for debt-stricken Greece.

Stocks | European Markets | Global Markets

Financial spreadbetters expected Britain’s FTSE 100 .FTSE to open 21 to 24 points higher, or as much as 0.4 percent, Germany’s DAX .GDAXI to open 24 to 25 points higher, or as much as 0.4 percent, and France’s CAC-40 .FCHI to open 10 to 13 points higher, or as much as 0.3 percent.

Euro zone finance ministers approved a 30-billion-euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday, but stressed Athens had not requested the plan be activated yet. [ID:nLDE63A0BO]

The deal sent the euro leaping to its highest level in nearly a month on Monday, surging 1 percent on the dollar and yen.

(Reporting by Blaise Robinson)

Nikkei rises 1 pct; Dentsu up on earnings estimate

TOKYO, April 12 (Reuters) – Japan’s benchmark Nikkei average rose 1 percent on Monday after better-than-expected U.S. wholesale inventories underscored a recovery in the U.S. economy, while ad agency Dentsu (4324.T) surged on improved earnings guidance.

Mitsubishi Corp (8058.T) and other trading houses rose after metals prices climbed, with gold hitting a 2010 high on Friday and spot palladium hitting a two-year high early on Monday. [ID:nLDE6380R0] [ID:nnTKU105936]

A broad swathe of Tokyo shares surged in the wake of the U.S. Dow’s rise above 11,000 for the first time in a year and a half on an upbeat outlook from Chevron (CVX.N) and the wholesale inventories data.

News that euro zone finance ministers approved a giant 30 billion euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday was another supportive factor, analysts said. [ID:nLDE63A0BO]

Despite persistent concerns that the Nikkei’s recent rally which took it to an 18-month high last week may have been too much too fast, the outlook for the market seems positive, analysts said.

“While there are some signs of overheating, the global economy is recovering and there are high hopes for corporate earnings,” said Hiroichi Nishi, general manager in the equity division of Nikko Cordial Securities.

The Nikkei rose 1 percent to 11,314.42 .N225, edging back towards an 18-month intraday peak of 11,408.17 hit last week.

The broader Topix index gained 1 percent to 999.02.

While the Nikkei’s trend looks bullish on daily Ichimoku charts, other technical indicators suggest that the market is overbought, with MACD getting close to flashing a sell signal.

The Nikkei is expected to find support at its 25-day moving average that now lies near 10,950.

U.S. wholesale inventories rose more than expected in February and sales at wholesalers reached their highest level in 16 months, brightening prospects for first-quarter economic and earnings growth. [ID:nN09141748]

Dentsu Inc, Japan’s biggest advertising agency, surged 3.7 percent to 2,695 yen after raising its operating profit estimate for the year ended in March to 33.9 billion yen ($364 million), up 31 percent from its previous forecast. [ID:nT9A9NGJ9]

Dai-Ichi Life Insurance (8750.T), which debuted on the Tokyo bourse this month following an $11 billion initial public offering, rose 1.3 percent to 161,800 yen on expectations there would be more demand for the stock as index compiler MSCI Barra is due to add it to its indexes on April 15.

Among trading houses, Mitsubishi Corp rose 2 percent to 2,491 yen, Mitsui & Co (8031.T) climbed 3 percent to 1,659 yen, and Itochu Corp (8001.T) rose 3.4 percent to 876 yen. (Additional reporting by Elaine Lies; Editing by Edwina Gibbs)

Nikkei rises 1.2 pct; Dentsu up on earnings estimate

TOKYO, April 12 (Reuters) – Japan’s benchmark Nikkei average rose 1.2 percent on Monday after better-than-expected U.S. wholesale inventories underscored a recovery in the U.S. economy, while ad agency Dentsu (4324.T) surged on improved earnings guidance.

Mitsubishi Corp (8058.T) and other trading houses rose after metals prices climbed, with gold hitting a 2010 high on Friday and spot palladium hitting a two-year high early on Monday. [ID:nLDE6380R0] [ID:nnTKU105936]

A broad swathe of Tokyo shares surged in the wake of the U.S. Dow’s rise above 11,000 for the first time in a year and a half on an upbeat outlook from Chevron (CVX.N) and the wholesale inventories data.

News that euro zone finance ministers approved a giant 30 billion euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday was another supportive factor, analysts said. [ID:nLDE63A0BO]

Despite persistent concerns that the Nikkei’s recent rally which took it to an 18-month high last week may have been too much too fast, the outlook for the market seems positive, analysts said.

“While there are some signs of overheating, the global economy is recovering and there are high hopes for corporate earnings,” said Hiroichi Nishi, general manager in the equity division of Nikko Cordial Securities.

The Nikkei rose 1.2 percent to 11,343.32 .N225, edging back towards an 18-month intraday peak of 11,408.17 hit last week.

The broader Topix index gained 1.2 percent to 1,000.75.

While the Nikkei’s trend looks bullish on daily Ichimoku charts, other technical indicators suggest that the market is overbought, with MACD getting close to flashing a sell signal.

The Nikkei is expected to find support at its 25-day moving average that now lies near 10,900.

U.S. wholesale inventories rose more than expected in February and sales at wholesalers reached their highest level in 16 months, brightening prospects for first-quarter economic and earnings growth. [ID:nN09141748]

Dentsu Inc, Japan’s biggest advertising agency, surged 3.9 percent to 2,701 yen after raising its operating profit estimate for the year ended in March to 33.9 billion yen ($364 million), up 31 percent from its previous forecast. [ID:nT9A9NGJ9]

Among trading houses, Mitsubishi Corp rose 1.9 percent to 2,489 yen, Mitsui & Co (8031.T) climbed 2.7 percent to 1,654 yen, and Itochu Corp (8001.T) rose 2.6 percent to 869 yen. (Additional reporting by Elaine Lies; Editing by Edwina Gibbs)

Nikkei may edge higher after gains on Wall Street

(Reuters) – Japan’s Nikkei average may rise on Monday after the Dow climbed above 11,000 for the first time in a year-and-a-half supported by wholesale inventories data that brightened prospects for economic growth.

Japan

One stock to watch will be Dentsu Inc (4324.T). Japan’s biggest advertising agency on Friday raised its operating profit estimate for the year ended in March to 33.9 billion yen ($364 million), up 31 percent from its previous forecast.

“While there are some signs of overheating, the global economy is recovering and there are high hopes for corporate earnings,” said Hiroichi Nishi, general manager in the equity division of Nikko Cordial Securities.

U.S. data released on Friday showed U.S. wholesale inventories rose more than expected in February and sales at wholesalers reached their highest level in 16 months, brightening prospects for first-quarter economic and earnings growth.

Nikkei futures traded in Chicago closed at 11,285.00 on Friday, up 0.7 percent from the Osaka close of 11,210, suggested a higher open for the benchmark Nikkei.

Market players said the Nikkei .N225 was likely to trade between 11,100 and 11,300, after rising 0.3 percent to 11,204.34 on Friday.

The Nikkei hit an 18-month intraday peak of 11,408.17 last week, supported by market expectations for a sharp improvement in corporate earnings in the new financial year that started in April and signs of a strengthening economic recovery in the United States.

While the Nikkei’s trend looks bullish on daily Ichimoku charts, other technical indicators suggest that the market is overbought, with MACD getting close to flashing a sell signal.

The Nikkei is expected to find support at its 25-day moving average that now lies near 10,900.

News that euro zone finance ministers approved a giant 30-billion-euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday may reassure investors and be a supportive factor for equities, market players said.

There have been concerns that worries over Greece’s fiscal woes may curb investor appetite for risk-taking in general. > Wall St climbs with energy sector, Dow touches 11,000 .N > Greek aid hopes boost euro against dollar Bonds rise on Greece jitters, long-dated bets > Gold hits 2010 high as Greece fear boosts buying > Oil drops below $85 on downbeat sentiment.

STOCKS TO WATCH

- Toshiba Corp

Japanese electronics maker Toshiba Corp is set to supply lithium-ion batteries for the electric motorcycles Honda Motor Co Ltd (7267.T) plans to launch later this year, the Nikkei business daily said on Sunday. This will be the first time Honda procures batteries from Toshiba, the paper said.

- Toyota Motor Corp

U.S. safety regulators may seek a second penalty against Toyota Motor Corp for knowingly delaying a massive recall over defective accelerator pedals, after imposing a record $16.4 million fine against the automaker.

- Sharp Corp (6753.T) and Panasonic Corp

Sharp and Panasonic will begin operating new liquid crystal display (LCD) panel plants at full capacity this summer, accelerating their plans due to strong demand, the Nikkei business daily reported.

(Reporting by Masayuki Kitano; Editing by Chris Gallagher)

Nikkei may edge higher after gains on Wall Street

TOKYO, April 12 (Reuters) – Japan’s Nikkei average may rise
on Monday after the Dow climbed above 11,000 for the first time
in a year-and-a-half supported by wholesale inventories data that
brightened prospects for economic growth.

One stock to watch will be Dentsu Inc (4324.T). Japan’s
biggest advertising agency on Friday raised its operating profit
estimate for the year ended in March to 33.9 billion yen ($364
million), up 31 percent from its previous forecast.
[ID:nT9A9NGJ9]

“While there are some signs of overheating, the global
economy is recovering and there are high hopes for corporate
earnings,” said Hiroichi Nishi, general manager in the equity
division of Nikko Cordial Securities.

U.S. data released on Friday showed U.S. wholesale
inventories rose more than expected in February and sales at
wholesalers reached their highest level in 16 months, brightening
prospects for first-quarter economic and earnings growth.
[ID:nN09141748]

Nikkei futures traded in Chicago closed at 11,285.00 2NKc1
on Friday, up 0.7 percent from the Osaka close JNIc1 of 11,210,
suggested a higher open for the benchmark Nikkei.

Market players said the Nikkei .N225 was likely to trade
between 11,100 and 11,300, after rising 0.3 percent to 11,204.34
on Friday.

The Nikkei hit an 18-month intraday peak of 11,408.17 last
week, supported by market expectations for a sharp improvement in
corporate earnings in the new financial year that started in
April and signs of a strengthening economic recovery in the
United States.

While the Nikkei’s trend looks bullish on daily Ichimoku
charts, other technical indicators suggest that the market is
overbought, with MACD getting close to flashing a sell signal.

The Nikkei is expected to find support at its 25-day moving
average that now lies near 10,900.

News that euro zone finance ministers approved a giant
30-billion-euro ($40 billion) emergency aid mechanism for
debt-plagued Greece on Sunday may reassure investors and be a
supportive factor for equities, market players said.
[ID:nLDE63A0BO]

There have been concerns that worries over Greece’s fiscal
woes may curb investor appetite for risk-taking in general.
> Wall St climbs with energy sector, Dow touches 11,000 [.N]
> Greek aid hopes boost euro against dollar [USD/]
> Bonds rise on Greece jitters, long-dated bets [US/]
> Gold hits 2010 high as Greece fear boosts buying [GOL/]
> Oil drops below $85 on downbeat sentiment [O/R]

STOCKS TO WATCH

– Toshiba Corp (6502.T)

Japanese electronics maker Toshiba Corp is set to supply
lithium-ion batteries for the electric motorcycles Honda Motor Co
Ltd (7267.T) plans to launch later this year, the Nikkei business
daily said on Sunday. This will be the first time Honda procures
batteries from Toshiba, the paper said.

– Toyota Motor Corp (7203.T)

U.S. safety regulators may seek a second penalty against
Toyota Motor Corp for knowingly delaying a massive recall over
defective accelerator pedals, after imposing a record $16.4
million fine against the automaker. [ID:nN10144044]

– Sharp Corp (6753.T) and Panasonic Corp (6752.T)

Sharp and Panasonic will begin operating new liquid crystal
display (LCD) panel plants at full capacity this summer,
accelerating their plans due to strong demand, the Nikkei
business daily reported. [ID:nSGE6380JT]
(Reporting by Masayuki Kitano; Editing by Chris Gallagher)

Euro zone readies giant rescue package for Greece

(Reuters) – Euro zone finance ministers approved a giant 30-billion-euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday but stressed Athens had not requested the plan be activated yet.

Together with at least 10 billion euros expected from the International Monetary Fund in the first year, it could add up to the biggest multilateral financial rescue ever attempted.

“With today’s decision, Europe sends a very clear message that no one, any longer, can play with our common currency, no one can play with our common fate,” Greece’s Prime Minister George Papandreou said in a statement.

In a rare weekend telephone conference, finance ministers of the 16 nations that share the single European currency backed a detailed plan for Greece to borrow from euro-zone governments and the IMF at significantly below market rates.

IMF chief, Dominique Strauss-Kahn, said the IMF was ready to provide help, possibly through a multi-year standby loan arrangement, and is set to hold talks with Greek, EU and European Central Bank officials in Brussels on April 12.

“The IMF stands ready to join the effort, including through a multi-year stand-by arrangement, to the extent needed and requested by the Greek authorities,” he said in a statement.

He welcomed the euro zone’s financial package for Greece, calling it an important step that will also help safeguard financial stability in the euro area as a whole.

A Greek Finance Ministry official said it was logical to expect the package would amount to significantly more than 40 billion euros over 3 years. Earlier in the day, he had said it could hit 80 billion euros, but later corrected this.

If Greece obtains aid, the package could dwarf past IMF bailouts for Mexico and Argentina. The largest IMF commitment ever made to a country was the $47 billion arrangement for Mexico approved in April 2009 under a so-called flexible credit line; Mexico has not drawn from the credit line.

The firepower in the Greek package, even if held in reserve, may reassure investors and make them more willing to continue buying Greek bonds. But big uncertainties remain over the longer-term prospects for reducing Greece’s debt mountain, which have dented confidence in the euro.

The Greek official said the government would decide within a few days whether to ask for the aid, depending on whether market interest rates subside.

European Economic and Monetary Affairs Commissioner Olli Rehn said the 3-year euro zone loans would carry an interest rate of about 5 percent — well below current market rates of about 7.3 percent. That responds to Greece’s appeal to be able to borrow at rates closer to its peers in the currency area.

Assistance for subsequent years would be decided later.

“If the mechanism had to be activated, it would not be a violation of the no-bailout clause (in the European Union treaty) since the loans are repayable and contain no element of subsidy,” Jean-Claude Juncker, chairman of the Eurogroup of finance ministers, told a Brussels news conference.

A German government official welcomed the agreement, which he said should enable Greece to do its fiscal “homework” on deficit reduction without market distraction.

“It should contribute to a calming of the markets so that Greece can take care of its homework in peace and quiet.”

Rehn said all euro zone countries would pay proportionately to their share in the ECB’s capital, making Germany by far the biggest lender, followed by France and Italy.

Talks on coordination with the IMF will begin on Monday, he said.

“GUN ON THE TABLE”

The agreement was urgently awaited because Athens is due to auction short-term debt on Tuesday after investors last week sent Greek borrowing costs spiraling due to fears of a possible default and doubts over the EU safety net.

Papandreou made clear in a newspaper interview that detailing the rescue plan was a last-ditch effort to deter speculation against his country.

“The question remains whether this mechanism will convince markets just like a gun on the table. If it does not convince them, it is a mechanism that it is there to be used,” he told the Sunday edition of To Vima.

But Finance Minister George Papaconstantinou told reporters after Sunday’s decision that Greece hoped to be able to continue to borrow smoothly on financial markets.

Skepticism over Greece’s ability to manage its 300 billion euro ($400 billion) debt pile, more than its 240 billion euro annual economic output, grew last week. Investors dumped Greek stocks and bonds, and ratings agency Fitch downgraded Athens’s debt by two notches on Friday.

Fitch lowered Greece’s credit rating to BBB-, the lowest investment grade just above junk, saying a deepening recession and rising debt service costs would make it harder for Athens to meet its budget deficit reduction target.

The government has imposed tough austerity measures to meet a pledge to cut the public deficit by four percentage points of gross domestic product to 8.7 percent this year.

Juncker said data provided by Greece showed the fiscal consolidation programme were encouraging and showed Athens was on track to reach this year’s target. Rehn said Greece would not be asked for further cuts this year, but would have to take more deficit-cutting steps, notably on pensions, in following years.

Strong public opposition to any bailout for Greece in Germany, Europe’s biggest economy and main paymaster, had fueled market doubts about the availability of any rescue.

Germany, the Netherlands and Austria argued that any emergency loans should be at current market rates to avoid moral hazard that would ensue if profligate countries were rewarded.

However, euro zone officials broke the deadlock on Friday, based on the IMF pricing formula with adjustments, Rehn said.

The euro, which has been dragged down by concerns over Greece and possible contagion with other weak Mediterranean euro zone economies, rebounded slightly on news of Friday’s technical agreement among deputy finance ministers and central bankers.

The risk premium that investors charge to hold Greek debt rather than benchmark 10-year German bonds narrowed to just over 400 basis points after hitting a record 454 on Thursday.

However, any durable reduction in the spread will depend on the credibility of the EU rescue plan and markets’ assessment of how likely it is to be invoked.

Greece needs to borrow about 11 billion euros by the end of May to refinance maturing debt and interest charges. Its overall 2010 borrowing requirement is 53 billion euros.

(Additional reporting by Marcin Grajewski in Brussels, Erik Kirschbaum in Berlin, Michele Kambas in Nicosia, Lesley Wroughton in Washington and Ingrid Melander in Athens; writing by Paul Taylor; editing by Michael Roddy and Gunna Dickson)

IMF set for talks on Greek aid on April 12 – IMF

WASHINGTON, April 11 (Reuters) – The International Monetary Fund is ready to contribute financing for Greece through a multi-year stand-by loan arrangement and will hold talks with Greek and European officials in Brussels on April 12, IMF chief Dominique Strauss-Kahn said on Sunday.

Bonds

“The IMF stands ready to join the effort, including through a multi-year stand-by arrangement, to the extent needed and requested by the Greek authorities,” Strauss-Kahn said in a statement. The talks in Brussels will include the European Union and European Central Bank.

Euro zone finance ministers earlier agreed on a giant 30 billion euro emergency aid mechanism for Greece but stressed that Athens had not asked for the plan to be activated yet. [nLDE63A0BO]

(Reporting by Lesley Wroughton)

Strong stocks face earnings test

(Reuters) – U.S. stock investors will watch the earnings numbers flow in this week to see how much momentum the rally can get from early profit reports.

The first-quarter figures come as the three major U.S. stock indexes finished a sixth straight week of gains, the best string since the rebound from 12 1/2-year lows in March 2009, and the Dow briefly popped above 11,000 late on Friday.

Those gains could make it tough for stocks to rally further, even with expectations, according to Thomson Reuters, for Standard & Poor’s 500 .SPX companies’ first-quarter earnings to rise 36.8 percent from a year ago.

Other events likely to spark attention this week: Federal Reserve Chairman Ben Bernanke testifies on the economic outlook before the Joint Economic Committee, while a plan to resolve Greece’s debt crisis should boost indexes.

Euro zone finance ministers approved a 30 billion-euro ($40 billion) emergency aid mechanism for Greece on Sunday that could lift a big uncertainty hanging over global markets.

“It was one of the clouds that prevented the U.S. from breaking through to new highs, so lifting this barrier will be a big positive. We have a lot of money on the sidelines globally and this could be a big catalyst to bring some of that money in,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates Inc. in Toledo, Ohio.

The earnings period kicks off with results from Dow component Alcoa Inc (AA.N) after the bell on Monday.

Besides Alcoa, results are expected this week from top tech companies Intel (INTC.O) and Google (GOOG.O), as well as from General Electric (GE.N) and JPMorgan Chase & Co (JPM.N).

“The reaction to some of these earnings is going to be really important. If you don’t get the setback, and it trades higher, I think you’re going to squeeze another wave of buyers into the market,” said Nick Kalivas, vice president of financial research and senior equity index analyst, at MF Global in Chicago.

While earnings are expected to be the focus, the week also brings the Consumer Price Index, March retail sales, industrial production, housing starts and consumer sentiment reports, which will help investors gauge the speed of the economic recovery.

RALLY MAY RUN INTO RESISTANCE

For the past week, the Dow Jones industrial average .DJI rose 0.6 percent, the S&P 500 gained 1.4 percent and the Nasdaq .IXIC increased 2.1 percent.

“The stock market has had a very significant rise off the (February) lows,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

“I wouldn’t be surprised to see some near-term pullback within the context of a rising stock market,” he said.

Much stronger-than-expected earnings have helped propel the S&P 500 more than 75 percent from the March 9, 2009, closing lows. But in the last earnings season, stocks actually lost about 3 percent as investors sold equities despite strong results.

Some 72 percent of companies beat earnings estimates in the fourth quarter, down from a record 79 percent in the previous quarter, but still well above the 61 percent in a typical quarter, Thomson Reuters data showed.

Technical indicators pointed to overbought conditions heading into this week’s earnings, which could mean a pullback is in store, some analysts say.

“Short-term momentum for the Dow has been deteriorating since March 23 after reaching an overbought condition,” said Chris Burba, short-term market technician at Standard & Poor’s.

The Dow briefly rose just above 11,000 moments before Friday’s closing bell, but ended at 10,997.35, while the S&P 500 neared the 1,200 mark. Both levels represent technical resistance, Burba said.

FED CHAIRMAN, CPI AND RETAIL SALES

Bernanke is scheduled to speak on Wednesday to a congressional panel called the Joint Economic Committee. Although data continues to show economic improvement, the Fed has reiterated its commitment to keep benchmark interest rates near zero.

Also on Wednesday’s agenda: the U.S. Consumer Price Index and the government’s data on retail sales, both for March.

The overall CPI is pegged to rise 0.1 percent in March from a flat reading in February, while core CPI, excluding volatile food and energy prices, is also seen up 0.1 percent, matching the previous month’s gain, according to economists polled by Reuters.

Retail sales are forecast to rise 1.2 percent in March from the previous month, and minus autos, sales are expected to gain 0.5 percent from February, according to economists polled by Reuters.

Thursday’s industrial output is forecast to show a gain of 0.7 percent in March from the previous month.

March housing starts, due on Friday, are expected to rise to a seasonally adjusted annual pace of 610,000 from 575,000 in the previous month. Friday’s Thomson Reuters/University of Michigan Surveys of Consumers report is expected to show the preliminary index on consumer sentiment at 75 for April. The index ended March at 73.6.

(Reporting by Caroline Valetkevitch; Additional reporting by Leah Schnurr and Chris Sanders; Editing by Jan Paschal and Gunna Dickson)

UPDATE 1-Wall St Week Ahead: Strong stocks face earnings test

NEW YORK, April 11 (Reuters) – U.S. stock investors will watch the earnings numbers flow in this week to see how much momentum the rally can get from early profit reports.

The first-quarter figures come as the three major U.S. stock indexes finished a sixth straight week of gains, the best string since the rebound from 12 1/2-year lows in March 2009, and the Dow briefly popped above 11,000 late on Friday.

Those gains could make it tough for stocks to rally further, even with expectations, according to Thomson Reuters, for Standard & Poor’s 500 .SPX companies’ first-quarter earnings to rise 36.8 percent from a year ago.

Other events likely to spark attention this week: Federal Reserve Chairman Ben Bernanke testifies on the economic outlook before the Joint Economic Committee, while a plan to resolve Greece’s debt crisis should boost indexes.

Euro zone finance ministers approved a 30 billion-euro ($40 billion) emergency aid mechanism for Greece on Sunday that could lift a big uncertainty hanging over global markets. For details see [ID:nLDE63A0BO]

“It was one of the clouds that prevented the U.S. from breaking through to new highs, so lifting this barrier will be a big positive. We have a lot of money on the sidelines globally and this could be a big catalyst to bring some of that money in,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates Inc. in Toledo, Ohio.

The earnings period kicks off with results from Dow component Alcoa Inc (AA.N) after the bell on Monday.

Besides Alcoa, results are expected this week from top tech companies Intel (INTC.O) and Google (GOOG.O), as well as from General Electric (GE.N) and JPMorgan Chase & Co (JPM.N).

“The reaction to some of these earnings is going to be really important. If you don’t get the setback, and it trades higher, I think you’re going to squeeze another wave of buyers into the market,” said Nick Kalivas, vice president of financial research and senior equity index analyst, at MF Global in Chicago.

While earnings are expected to be the focus, the week also brings the Consumer Price Index, March retail sales, industrial production, housing starts and consumer sentiment reports, which will help investors gauge the speed of the economic recovery.

RALLY MAY RUN INTO RESISTANCE

For the past week, the Dow Jones industrial average .DJI rose 0.6 percent, the S&P 500 gained 1.4 percent and the Nasdaq .IXIC increased 2.1 percent.

“The stock market has had a very significant rise off the (February) lows,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

“I wouldn’t be surprised to see some near-term pullback within the context of a rising stock market,” he said.

Much stronger-than-expected earnings have helped propel the S&P 500 more than 75 percent from the March 9, 2009, closing lows. But in the last earnings season, stocks actually lost about 3 percent as investors sold equities despite strong results.

Some 72 percent of companies beat earnings estimates in the fourth quarter, down from a record 79 percent in the previous quarter, but still well above the 61 percent in a typical quarter, Thomson Reuters data showed.

Technical indicators pointed to overbought conditions heading into this week’s earnings, which could mean a pullback is in store, some analysts say.

“Short-term momentum for the Dow has been deteriorating since March 23 after reaching an overbought condition,” said Chris Burba, short-term market technician at Standard & Poor’s.

The Dow briefly rose just above 11,000 moments before Friday’s closing bell, but ended at 10,997.35, while the S&P 500 neared the 1,200 mark. Both levels represent technical resistance, Burba said.

FED CHAIRMAN, CPI AND RETAIL SALES

Bernanke is scheduled to speak on Wednesday to a congressional panel called the Joint Economic Committee. Although data continues to show economic improvement, the Fed has reiterated its commitment to keep benchmark interest rates near zero.

Also on Wednesday’s agenda: the U.S. Consumer Price Index and the government’s data on retail sales, both for March.

The overall CPI is pegged to rise 0.1 percent in March from a flat reading in February, while core CPI, excluding volatile food and energy prices, is also seen up 0.1 percent, matching the previous month’s gain, according to economists polled by Reuters.

Retail sales are forecast to rise 1.2 percent in March from the previous month, and minus autos, sales are expected to gain 0.5 percent from February, according to economists polled by Reuters.

Thursday’s industrial output is forecast to show a gain of 0.7 percent in March from the previous month.

March housing starts, due on Friday, are expected to rise to a seasonally adjusted annual pace of 610,000 from 575,000 in the previous month. Friday’s Thomson Reuters/University of Michigan Surveys of Consumers report is expected to show the preliminary index on consumer sentiment at 75 for April. The index ended March at 73.6. (Wall St Week Ahead runs every Sunday. Questions or comments on this one can be e-mailed to: caroline.valetkevitch(at)thomsonreuters.com) (Reporting by Caroline Valetkevitch; Additional reporting by Leah Schnurr and Chris Sanders; Editing by Jan Paschal and Gunna Dickson)

UPDATE 1-Wall St Week Ahead: Strong stocks face earnings test

NEW YORK, April 11 (Reuters) – U.S. stock investors will watch the earnings numbers flow in this week to see how much momentum the rally can get from early profit reports.

The first-quarter figures come as the three major U.S. stock indexes finished a sixth straight week of gains, the best string since the rebound from 12 1/2-year lows in March 2009, and the Dow briefly popped above 11,000 late on Friday.

Those gains could make it tough for stocks to rally further, even with expectations, according to Thomson Reuters, for Standard & Poor’s 500 .SPX companies’ first-quarter earnings to rise 36.8 percent from a year ago.

Other events likely to spark attention this week: Federal Reserve Chairman Ben Bernanke testifies on the economic outlook before the Joint Economic Committee, while a plan to resolve Greece’s debt crisis should boost indexes.

Euro zone finance ministers approved a 30 billion-euro ($40 billion) emergency aid mechanism for Greece on Sunday that could lift a big uncertainty hanging over global markets. For details see [ID:nLDE63A0BO]

“It was one of the clouds that prevented the U.S. from breaking through to new highs, so lifting this barrier will be a big positive. We have a lot of money on the sidelines globally and this could be a big catalyst to bring some of that money in,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates Inc. in Toledo, Ohio.

The earnings period kicks off with results from Dow component Alcoa Inc (AA.N) after the bell on Monday.

Besides Alcoa, results are expected this week from top tech companies Intel (INTC.O) and Google (GOOG.O), as well as from General Electric (GE.N) and JPMorgan Chase & Co (JPM.N).

“The reaction to some of these earnings is going to be really important. If you don’t get the setback, and it trades higher, I think you’re going to squeeze another wave of buyers into the market,” said Nick Kalivas, vice president of financial research and senior equity index analyst, at MF Global in Chicago.

While earnings are expected to be the focus, the week also brings the Consumer Price Index, March retail sales, industrial production, housing starts and consumer sentiment reports, which will help investors gauge the speed of the economic recovery.

RALLY MAY RUN INTO RESISTANCE

For the past week, the Dow Jones industrial average .DJI rose 0.6 percent, the S&P 500 gained 1.4 percent and the Nasdaq .IXIC increased 2.1 percent.

“The stock market has had a very significant rise off the (February) lows,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

“I wouldn’t be surprised to see some near-term pullback within the context of a rising stock market,” he said.

Much stronger-than-expected earnings have helped propel the S&P 500 more than 75 percent from the March 9, 2009, closing lows. But in the last earnings season, stocks actually lost about 3 percent as investors sold equities despite strong results.

Some 72 percent of companies beat earnings estimates in the fourth quarter, down from a record 79 percent in the previous quarter, but still well above the 61 percent in a typical quarter, Thomson Reuters data showed.

Technical indicators pointed to overbought conditions heading into this week’s earnings, which could mean a pullback is in store, some analysts say.

“Short-term momentum for the Dow has been deteriorating since March 23 after reaching an overbought condition,” said Chris Burba, short-term market technician at Standard & Poor’s.

The Dow briefly rose just above 11,000 moments before Friday’s closing bell, but ended at 10,997.35, while the S&P 500 neared the 1,200 mark. Both levels represent technical resistance, Burba said.

FED CHAIRMAN, CPI AND RETAIL SALES

Bernanke is scheduled to speak on Wednesday to a congressional panel called the Joint Economic Committee. Although data continues to show economic improvement, the Fed has reiterated its commitment to keep benchmark interest rates near zero.

Also on Wednesday’s agenda: the U.S. Consumer Price Index and the government’s data on retail sales, both for March.

The overall CPI is pegged to rise 0.1 percent in March from a flat reading in February, while core CPI, excluding volatile food and energy prices, is also seen up 0.1 percent, matching the previous month’s gain, according to economists polled by Reuters.

Retail sales are forecast to rise 1.2 percent in March from the previous month, and minus autos, sales are expected to gain 0.5 percent from February, according to economists polled by Reuters.

Thursday’s industrial output is forecast to show a gain of 0.7 percent in March from the previous month.

March housing starts, due on Friday, are expected to rise to a seasonally adjusted annual pace of 610,000 from 575,000 in the previous month. Friday’s Thomson Reuters/University of Michigan Surveys of Consumers report is expected to show the preliminary index on consumer sentiment at 75 for April. The index ended March at 73.6. (Wall St Week Ahead runs every Sunday. Questions or comments on this one can be e-mailed to: caroline.valetkevitch(at)thomsonreuters.com) (Reporting by Caroline Valetkevitch; Additional reporting by Leah Schnurr and Chris Sanders; Editing by Jan Paschal and Gunna Dickson)

UPDATE 1-Germany says Greece deal should help calm markets

BERLIN, April 11 (Reuters) – The German government welcomes an agreement by euro zone finance ministers on how to help debt-plagued Greece if needed, a government official told Reuters on Sunday.

The official, speaking on the condition of anonymity, said the agreement reached in a teleconference on Sunday should help calm financial markets so that Greece can focus on taking care of its “homework” on debt reduction without market distraction.

“It corresponds to what we wanted,” the German government official said. “The euro zone is capable of taking action.

“It should contribute to a calming of the markets so that Greece can take care of its homework in peace and quiet.”

He stressed that the euro zone finance ministers had merely made preparations for an emergency.

“The fire brigade is now ready for action and the water tanks are filled up,” he said.

“But it won’t leave the station until there’s a call for help. The chances are greater now that there won’t be a call for help. The house has been made fireproof now.”

Euro zone finance ministers unanimously approved a detailed 30 billion euros emergency aid mechanism for Greece but stressed it had not requested that the plan be activated now. (Reporting by Rene Wagner; writing by Erik Kirschbaum; Editing by Mike Nesbit)

Eurogroup prices Greek emergency loans at 5 pct/3yrs

BRUSSELS, April 11 (Reuters) – Euro zone finance ministers priced potential emergency aid to Greece at around 5 percent for a 3 year loan, Economic and Monetary Affairs Commissioner Olli Rehn said on Sunday.

Bonds

In a rare weekend telephone conference, ministers from the 16 nations that share the single European currency backed a plan for Greece to borrow from euro zone governments and the IMF at below current market rates if market funding dries up.

“As regards the pricing formula, these loans, if needed, will be granted on non-concessional interest rates and the pricing formula used by the IMF is an appropriate benchmark, albeit with some adjustments,” Rehn said.

“The agreed pricing formula could yield an interest rate of around 5 percent. For instance, for a three-year, fixed-rate loan granted to Greece, the rate would be around these 5 percent,” Rehn told a news conference.

(Reporting by Jan Strupczewski and Marcin Grajewski editing by xxxxx )

EURO GOVT-Peripherals outperform on Greek deal talk

* Peripherals outperform on speculation about Greek deal

* Bund futures retreat from 3-wk highs, seen over valued

* Next stage of ECB’s exit plan expected on Thursday

By Kirsten Donovan

LONDON, March 1 (Reuters) – Greek and other peripheral euro zone government bonds outperformed German Bunds on Monday on signs that Athens might be nearing a deal with European Union governments to ease the country’s debt crisis.

EU Economic Affairs Commissioner Olli Rehn was due to visit Athens on Monday for talks with Greek officials about the crisis, which has rocked Europe’s debt market and undermined investors’ confidence in the common euro currency.

The market speculated that Rehn’s visit, if successful, could move EU governments closer to announcing some form of emergency aid for Greece in exchange for a pledge by Athens to take fresh budget steps. [ID:nLDE61R0BX]

German Bund futures retreated from three-week highs and the 10-year Greek bond yield spread over Bunds narrowed as much as 35 basis points to 302 bps, the least since mid-February.

Other peripheral debt also outperformed, with the Spanish 10-year spread down 6 bps at 71 bps and the Italian spread narrowing 6 bps to 84 bps.

“We seem to be getting closer to a deal on Greece in some shape or form,” said Nomura rate strategist Sean Maloney.

“That being the case it’s pretty clear that markets such as Germany are heavily overvalued and we’re seeing a reversal of the flight-to-quality flows that have been backing us up for so long.”

On Saturday, a German member of the European Parliament said Germany, France and the Netherlands plan to buy Greek bonds to help Athens cope with a severe debt crisis.

The cost of insuring against a Greek default fell to 336,500 euros per 10 million euros of exposure from 364,000 at the New York close, according to 5-year CDS prices from CMA DataVision.

Other peripheral CDS prices also fell, although not to the same degree, and the SovX index of Western European CDS prices narrowed to 83.5 bps from 90 bps at Friday’s close.

At 0908 GMT, March Bund futures FGBLH0 were 26 ticks lower than at Friday’s settlement close, at 124.19. Two-year bond yields EU2YT=RR were a basis point higher at 0.886 percent, with 10-year yields EU10YT=RR 2 bps higher at 3.126 percent.

Markets are awaiting Greece’s expected syndicated bond sale, but Nomura’s Maloney said he expected Athens to wait until there was more concrete news on any rescue package.

DEBT MOUNTAIN

Already sitting on a mountain of debt and staring at a budget deficit of 12.7 percent of gross domestic product – more than four times the amount allowed under European Union rules – Greece needs to raise about 12 billion euros to bide its coffers over to the end of April and 20 billion euros by end-May.

“We expect that Greece will be able to obtain funding — albeit at very unfavourable conditions — and Bunds, especially in the medium and longer maturity sectors, will lose ground as tensions ease,” Commerzbank strategists said in a note.

Away from Greece, Germany, France and Spain are set to sell up to 18.5 billion euros of bonds this week but the end of a multi-week cash drought may support the issuance [EURODEBT/O].

Another focus this week will the European Central Bank’s policy meeting on Thursday, when the bank’s President Jean-Claude Trichet is expected to detail the next stage of the exit from extraordinary stimulus measures.