* World shares rise as Alcoa points to rising global demand
* Dollar gains versus yen on expectations of BOJ easing
* Brent crude stays below $112 per barrel
By Luciana Lopez and Richard Hubbard
NEW YORK/LONDON Jan 9 Global equities recovered
modestly from a two-day slip on Wednesday after aluminum maker
Alcoa opened the U.S. earnings season with a brighter
outlook for global demand.
However, investors were cautious before policy meetings of
European and British central banks on Thursday, when Spain also
tests appetite for peripheral euro zone debt.
Alcoa, the largest aluminum producer in the United
States, said late on Tuesday it is cautiously optimistic about
demand for the metal in 2013, buoyed by aerospace and
Suggestions of growing demand in China in Alcoa's results
are also significant, said Andrew Wilkinson, chief economic
strategist at Miller Tabak & Co. in New York.
"Such anecdotal signs that the belly of the Chinese dragon
is starting to rumble again will not go unnoticed by investors
around the world," he said.
Key U.S. stock indexes rose at the open, lifted by the Alcoa
results. The Dow Jones industrial average gained 36.93
points, or 0.28 percent, to 13,365.78. The Standard & Poor's 500
Index rose 2.64 points, or 0.18 percent, to 1,459.79. The
Nasdaq Composite Index advanced 7.35 points, or 0.24
percent, to 3,099.15.
Alcoa's results lifted Asian stocks and pushed Europe's FTSE
Eurofirst 300 index up 0.48 percent, leaving the MSCI
world equity index with a gain of 0.31 percent.
London's FTSE 100 rose 0.73 percent, as well.
Corporate profits for the fourth quarter are generally
expected to be higher than in the lackluster previous three
months, but analysts' estimates are down sharply from October.
Investors are also still worried about White House and
congressional wrangling over raising the $16 trillion U.S. debt
ceiling in coming weeks, which could become a reprise of 2011's
battle that led to the United States' sovereign credit rating
Prices for U.S. government debt advanced ahead of an auction
of $21 billion in 10-year notes.
German government bond prices also gained following a
successful auction of new five-year debt, which continued a
string of strong European sales this week with Austria, the
Netherlands and Ireland all tapping the market.
But a big test for the market looms on Thursday when Spain
and Italy hold their first debt sales of the year, revealing
the depth of demand for peripheral euro zone debt.
The Spanish auction could also offer clues on the timing of
a much-anticipated request by the government for international
Surging demand for high grade corporate debt in the United
States has put the new issue market on course for a record week.
Thomson Reuters IFR said new issue volume totalled a massive $33
billion by the end of Tuesday, and only $7.6 billion more was
needed to match the previous weekly record of $40.6 billion.
The dollar climbed against the yen, moving back towards a
2-1/2 year high hit last week, on expectations of a much bolder
monetary easing from the Bank of Japan at its next meeting later
The U.S. currency was up 0.83 percent at 87.75 yen.
"The outlook for additional easing is keeping a lid on the
yen to the upside," said Omer Esiner, chief market analyst at
Commonwealth Foreign Exchange in Washington.
Sources familiar with the BOJ's thinking told Reuters the
central bank was likely to adopt a 2 percent inflation target at
the meeting, double its current goal, and issue a statement with
the government promising to pursue bold monetary easing steps.
The euro was slightly lower at $1.3037, easing after
German industrial output rose less than expected in November.
The data were unlikely to change the ECB's thinking, with
most analysts expecting interest rates to be kept on hold on
Thursday, though some believe rates will be cut later this year.
Brent crude oil was below $112 per barrel on increasing
supply from the United States. Front-month Brent futures
slipped 0.16 percent to $111.76.