Media Quotes

Adam Sarhan Quote: Euro, global shares rally on Spanish hopes, U.S. earnings

Published: Tuesday, 16 Oct 2012 | 10:54 AM ET
NEW YORK (Reuters) – World shares rose for a second day on Tuesday and the euro rallied against the U.S. dollar after a report said Germany could show greater flexibility toward aid to Spain and as U.S. corporate earnings surprised on the upside.
Returning confidence in Germany suggested the euro zone debt crisis is not impacting the bloc’s largest economy as much as feared, giving stocks and the euro further support.
U.S. stocks opened higher, boosted by earnings reports from sector bellwethers Johnson & Johnson and Goldman Sachs, which posted a profit as revenue more than doubled.
“That a financial is able to have results like that in this kind of low-growth environment bodes well for the economy as a whole,” said Adam Sarhan, chief executive officer at Sarhan Capital in New York.
The Dow Jones industrial average <.DJI> rose 97.45 points, or 0.73 percent, to 13,521.68. The S&P 500 <.SPX> gained 10.24 points, or 0.71 percent, to 1,450.37. The Nasdaq Composite <.IXIC> added 15.22 points, or 0.50 percent, to 3,079.41.
Citigroup <C.N> unexpectedly announced that chief executive Vikram Pandit had resigned effective immediately, along with chief operating officer John Havens. Citi shares rose 0.6 percent.
U.S. stocks bounced back on Monday after posting their worst week in four months on Friday. Major indexes are trading in tight ranges with the S&P 500 now just 1 percent below its 2012 closing high set a month ago.
The closely watched monthly survey from the ZEW institute showed a better than expected improvement in German investor confidence, adding to recent signs that the euro zone’s biggest economy is fighting hard to stave off the bloc’s debt troubles.
The FTSE Eurofirst 300 index <.FTEU3> and an MSCI index of global shares <.WORLD> rose 1.2 percent and 1.1 percent respectively.
European leaders meet in Brussels on Thursday and investors are looking for clues on whether Spain will ask for a bailout in the coming weeks, thereby activating the European Central Bank’s bond buying scheme, and if Greece will be given support to allow it to stay in the euro.
The euro rose to a one-week high against the dollar and four-week high against the yen and sterling, with traders citing a media report that Germany was open to a precautionary line of credit for Spain.
The Bloomberg report, citing two senior German coalition lawmakers, implies an easing of Berlin’s hard-line stance and clears the way for Madrid to ask for financial help, a step seen by many as necessary to stem the country’s debt crisis.
The single currency was recently up 0.86 percent at $1.3059.
Spanish and Italian debt prices rose slightly but the moves were not expected to extend beyond recent ranges, with uncertainty over Spain and Greece still high. <GVD/EUR>
U.S. Treasuries prices fell as the strong U.S. earnings boosted stocks and reduced the appeal of safe haven debt.
The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 1.7099 percent. The 30-year bond earlier lost a full point in price, its yield up at 2.89 percent.