* U.S., European stocks rise, Asian stocks fall
* Euro falls further on Thursday's ECB news
* European bank stocks snap rally
* Oil rises, U.S. treasury yields higher
(Updates to U.S. open, changes byline, previous dateline
By Sinead Carew
NEW YORK, Dec 9 U.S stocks followed Europe
higher on Friday while the euro weakened against the dollar
after the European Central Bank's Thursday decision to extend
its stimulus program.
U.S. Treasury yields climbed with benchmark yields on track
for a fifth straight week of increases following
stronger-than-forecast Chinese inflation data and ahead of $56
billion of coupon-bearing government bond supply next week.
European shares hit their highest level since January, and
were set for their best week since February, following the ECB's
decision to cut monthly bond buys to 60 billion euros ($63.7
billion) from 80 billion euros and extend purchases to December
- three months longer than analyst forecasts.
Stocks were helped by inflation data from China, rising
prices of some commodities and general optimism after the ECB
decision and before a U.S. Federal Reserve statement due out on
Wednesday, according to Frances Hudson, global thematic
strategist based in Edinburgh for Standard Life Investments.
"The markets are glass half-full, interpreting things in a
fairly optimistic way," said Hudson.
The ECB's indication it would extend monetary support for as
long as needed complemented the promise from U.S. President
Elect Donald Trump of fiscal stimulus, according to analysts.
But some participants said 2016 could be the high water mark for
monetary easing, less than a week before the U.S. Fed is widely
expected to raise over-night interest rates.
"You have to say central bank stimulus has peaked in 2016,"
said Charles Mackenzie, chief investment officer, fixed income,
at Fidelity International.
The Dow Jones industrial average was up 47.49 points,
or 0.24 percent, to 19,662.3, the S&P 500 gained 6.63
points, or 0.3 percent, to 2,252.82 and the Nasdaq Composite
added 25.22 points, or 0.47 percent, to 5,442.57.
Europe's STOXX 600 was up 0.6 percent even though
European bank stocks pulled back 0.4 percent. Reuters
reported that the ECB had rejected a request from Italy's Monte
Paschi for more time to raise cash. The continent's
banking sector was still up almost 10 percent for the week, its
biggest weekly jump since December 2011.
The euro dipped for a second day, after Thursday's ECB news
caused its biggest daily loss against the dollar since Britain's
vote to leave the European Union in June.
The euro was trading around $1.0543, down 0.7 percent
against the dollar and down 1.2 percent for the week. The
dollar was up 0.6 percent on the day up 0.9 percent for
the week against a basket of major currencies.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.3 percent, though it posted a weekly gain
of 1.9 percent. Japan's Nikkei ended 1.2 percent up at
its highest close since December 2015.
Oil rose on growing optimism that non-OPEC producers might
follow the cartel's lead by agreeing to cut output.
U.S. crude added 1.4 percent to $51.54 a barrel.
Brent crude rose 0.7 percent to $54.24.
Spot gold was down 0.7 percent and was set for a
weekly decline of 1.2 percent, pressured by the stronger U.S.
dollar and expectations of a Fed rate hike.
(Additional reporting by Abhinav Ramnarayan; Editing by Mark
Trevelyan and Nick Zieminski)