* German Ifo data bolsters expectations of ECB rate cut
* European shares build on biggest jump in seven months
* Euro hits three-week lows vs dollar before rebound
* Durable goods data weighs on U.S. stocks
By Herbert Lash
NEW YORK, April 24 (Reuters) - Global equity markets rose on
Wednesday, drawing support from strong corporate earnings and
speculation the European Central Bank will cut interest rates
after the release of weak economic data out of Germany for a
second straight day.
Wall Street traded flat to lower after the Commerce
Department reported that U.S. durable goods recorded their
biggest drop in seven months in March, which tempered enthusiasm
over what has so far been a relatively robust U.S. earnings
season.
A gauge of planned business spending rose only modestly,
indicating a slowdown in U.S. economic activity that also
weighed on U.S. equities.
European equities, however, got a boost after Germany's
Munich-based Ifo think-tank reported that business sentiment in
the country fell in April for a second consecutive month, coming
in below even the most pessimistic forecasts. The news, which
came a day after weak data on German business activity, weighed
on the euro.
The Ifo report added to the view that the ECB is closer to
lowering interest rates than at any time since its last rate cut
in July 2012, and is likely to shave off a quarter-point at its
policy meeting next week.
"There is enthusiasm the ECB is poised to cut rates and that
simply means more liquidity, and that is the underlying, basic
strong factor for stock markets around the globe," said Peter
Cardillo, chief market economist at Rockwell Global Capital in
New York.
Cardillo said earnings continue to surprise to the upside
for the most part, so enthusiasm for equities continues to grow.
Analysts see earnings growth of 3.1 percent this quarter, up
from expectations of 1.5 percent at the start of the month.
Of the 174 companies in the S&P 500 index that already have
reported first-quarter results, 68.4 percent have beat analysts'
expectations, according to Thomson Reuters data through
Wednesday morning. Since 1994, 63 percent have surpassed
estimates on average, while the beat rate is 67 percent over the
past four quarters.
Global equity markets, as measured by MSCI (NYSE: MSCI - news) 's all-country
world equity index, rose 0.58 percent to 363.16.
On Wall Street, the Dow Jones (DJI: ^DJI - news) industrial average was
down 21.66 points, or 0.15 percent, to 14,697.80. The Standard &
Poor's 500 Index gained 1.38 points, or 0.09 percent, to
1,580.16. The Nasdaq Composite Index gained 0.10 points,
or 0.00 percent, to 3,269.43.
European shares chalked up a fourth straight session of
gains. The FTSEurofirst 300 of top regional shares
closed up 0.7 percent at 1,191.82.
British insurer Standard Life (LSE: SL.L - news) and Portuguese retailer
Jeronimo Martins led gainers, surging 8.0 percent and
6.8 percent, respectively, after announcing strong first-quarter
numbers. Volume was three and five times their average for the
past 90 days.
European shares extended gains in late trading as dovish
comments by ECB Vice President Vitor Constancio fueled talk of a
rate cut next week to stimulate the economy after the weak
German data. Constancio said monetary policy "will continue to
be accommodative."
"A rate cut is on the cards," said Ronnie Chopra, head of
strategy at Tradenext.
U.S. crude rose on expectations a glut of crude at the
Cushing, Oklahoma, storage hub could ease and on a steep 3.9
million barrel drop in gasoline inventories last week.
Brent futures settled up $1.42 to $101.73 a barrel.
U.S. crude futures gained $2.25 to settle at $91.43.
The euro initially edged lower against the dollar but held
above a near three-week low as hopes that Italy can resolve its
political gridlock were trumped by the weak German data, which
fanned talk of an ECB rate cut.
The euro dropped to $1.2954, its lowest since April
5, before paring losses to trade slightly higher at $1.3015.
The benchmark 10-year U.S. Treasury note rose
2/32 in price to yield 1.6978 percent.
