NEW YORK: Major stock markets rose sharply on Wednesday after strong corporate earnings in both the United States and Europe, while gold jumped to record highs above $1,500 an ounce in a broad commodities rally.
Weakness in the US dollar and a well-received bond auction from Spain pushed the euro to its highest in 15 months. Currencies that benefit from higher commodity prices outperformed, with the Australian dollar at a post-float high and the Canadian dollar hitting a 3-1/2-year high.
Upbeat profits and outlooks from companies including chipmaker Intel bolstered economic optimism and offset concerns of sovereign debt problems on both sides of the Atlantic.
"It isn't just the good reports, but also the encouraging comments about how things look for the remainder of the year," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
"This is a testament to the strength of earnings we can expect to come out from here," added Luschini, who helps oversee $53 billion and owns Intel shares.
World equities, as measured by the MSCI All-Country World Index advanced 2.1 percent, extending the previous session's 0.5 percent rise and further recovering from Monday's 1.6 percent loss.
Intel posted higher than expected sales and forecast quarterly revenues well above estimates. The world's biggest cosmetics group, L'Oreal, and carmaker PSA Peugeot Citroen also came in with robust figures.
US stocks posted their best day in a month, lifting the Dow industrials to the highest in almost three years.
The Dow Jones industrial average gained 186.79 points, or 1.52 percent, to end at 12,453.54. The Standard & Poor's 500 Index rose 17.74 points, or 1.35 percent, to finish at 1,330.36. The Nasdaq Composite Index climbed 57.54 points, or 2.10 percent, to close at 2,802.51.
Japan's Nikkei average ended up 1.76 percent, snapping a three-day losing run. The pan-European FTSEurofirst 300 rose 1.9 percent to close at a one-week high. Emerging market stocks climbed 2.6 percent.
Societe Generale, however, said in a note that hedge funds were cautious on US equities, keeping short positions on the S&P 500 and the Russell 2000, though they were net long on Japanese equities.
DEBT WORRIES
Gold breached $1,500 an ounce for the first time and silver hit a 31-year high. Concerns about government debt problems, inflation and turmoil in the Middle East also helped boost gold prices.
Renewed pressure on Greece to explore a debt restructuring has rattled peripheral debt markets in recent sessions, pushing Greek and Portuguese bond yields to new highs.
Yields on 10-year Spanish government bonds fell to 5.46 percent after Spain saw solid demand for 10- and 13-year bonds at an auction, though worries about Greece forced Madrid to pay higher yields than a month ago to attract investors.
The euro rose 1.3 percent versus the dollar to $1.4518, pulling further away from this week's low around $1.4155. The euro gained 1 percent to 119.63 yen.
"All in all, relatively reassuring results providing no indication Spain's decoupling from the periphery is under immediate threat. That said, the risk of contagion has certainly not been taken off the table," said Richard McGuire, rate strategist at Rabobank.
Higher-yielding currencies rose. The Australian dollar was up 1.6 percent at $1.0692 after hitting a post-float high of $1.0695. Against the Canadian dollar, the US currency fell as low as C$0.9498.
Against a basket of major currencies, the US dollar fell 0.9 percent to 74.328.
The soft dollar boosted commodities, with copper hitting a one-week high. ICE Brent crude for June delivery settled up $2.52 a barrel to $123.85, after reaching a high of $124.23. US June crude gained $3.17 to settle at $111.45 a barrel, the highest since April 18, as US crude oil inventories fell for the first time in seven weeks.
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