Fri Jun 8, 2012 5:13pm EDT
* U.S. stocks end up, but MSCI world share index down 0.25
pct
* Uncertain central bank policy outlook weighs on oil
* Spain's bank problems, German economic slowdown in focus
By Wanfeng Zhou
NEW YORK, June 8 (Reuters) - U.S. equities ended on Friday
on a high note, with the benchmark S&P 500 index registering its
best week of the year as investors returned to stocks on
expectations Spain was closer to getting aid for its troubled
banks.
Oil prices fell as diminished hopes for more stimulus from
central banks fueled concerns about demand.
The euro slid against the dollar, weighed by a three-notch
downgrade to Spain's credit rating and signs of economic
weakness in Italy and Germany, though it posted its first weekly
gain in six weeks.
Senior EU and German officials told Reuters that deputy
finance ministers of the 17-nation single currency area would
hold a conference call on Saturday morning to discuss Spain's
request for an aid package for its ailing banks, although no
figure had been set.
On Wall Street, the S&P 500 ended its best week in 2012. The
strong gains came after the benchmark index fell more than 6
percent in May and dropped just below its 200-day moving
average, signaling a technical bounce for equities.
"What's driving the market here," said Robbert Van
Batenburg, head of equity research at Louis Capital in New York,
"is the belief we're in the final innings of approaching some
form of a solution to contain the Spanish problem. I don't buy
it, but maybe there's this understanding out there."
The Dow Jones industrial average ended up 93.24
points, or 0.75 percent, at 12,554.20. The Standard & Poor's 500
Index was up 10.67 points, or 0.81 percent, at 1,325.66.
The Nasdaq Composite Index was up 27.40 points, or 0.97
percent, at 2,858.42.
Stocks elsewhere, however, edged lower. The MSCI's world
equity index was down 0.25 percent at 300.42.
The index is still up 3 percent on the week, its best week since
January.
Top European shares closed 0.2 percent lower. The
MSCI Emerging Equity Index fell 0.9 percent.
Losses in world shares followed a three-day rally built on
expectations of global coordinated efforts to bolster slackening
economic growth. But investors were disappointed after neither
the European Central Bank nor the U.S. Federal Reserve signaled
near-term action.
U.S. President Barack Obama said on Friday that European
leaders face an "urgent need to act" to resolve the region's
financial crisis as the threat of a renewed recession there
spells dangers for an anemic U.S. recovery five months before
elections.
The euro fell 0.5 percent to $1.2501, retreating from
a two-week high of $1.2625 hit o n T hursday. The dollar slid 0.3
percent to 79.40 yen.
Rating agency Fitch slashed Spain's credit rating on
T hursday, leaving it just two notches above junk status. It
signaled further downgrades could come as the country tries to
restructure its troubled banking system.
Adding to the bearish sentiment was data showing Italian
industrial production fell far more than expected in April and
German imports tumbled at their fastest rate in two years. The
U.S. trade deficit also narrowed as both exports and imports
dropped due to the economic weakness.
Speculators boosted bets against the euro to a record high
in the latest week, according to data from the Commodity Futures
Trading Commission released on Friday.
"We are now less confident that the euro zone will continue
to muddle through," said global macro hedge fund GLC Ltd in
London. "The countries that need to make the biggest adjustment
have the weakest economies. In addition, austerity fatigue is
spreading."
Brent crude for July was down 46 cents to settle at
99.47 a barrel, after hitting a low of $97.19.
U.S. crude prices fell 72 cents to settle at $84.10 a
barrel, having touched a low of $82.00. Both contracts are down
for a second day.
Copper fell to its lowest since December as investors feared
China's surprise interest-rate cut was a sign of a sharp
slowdown in the world's biggest metals consumer.
The metal, seen as a barometer of global economic health,
extended its losing streak to a sixth week, its longest such run
in two years.
Spot gold rose to $1,594 an ounce from $1,589.15 late
in New York on Thursday, reversing heavy losses as uncertainty
over Spanish banks encouraged safe-haven buying.
The benchmark 10-year U.S. Treasury note was up 3/32, the
yield at 1.6336 percent.
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