* 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
NEW YORK Jan 9 Global equities climbed on
Wednesday after aluminum maker Alcoa opened the U.S.
earnings season with a brighter outlook for global demand, while
the dollar rose against the yen on expectations of more easing
from the Bank of Japan this month.
However, investors were wary before policy meetings of the
European and British central banks on Thursday, when Spain also
tests the market's 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
Hints in Alcoa's results of a Chinese recovery were 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.
U.S. stock indexes rose in early trading, lifted by the
Alcoa results. The Dow Jones industrial average gained
74.08 points, or 0.56 percent, at 13,402.93. The Standard &
Poor's 500 Index was up 5.49 points, or 0.38 percent, at
1,462.64. The Nasdaq Composite Index was up 14.66
points, or 0.47 percent, at 3,106.47.
Alcoa's results also buoyed Asian stocks and pushed Europe's
FTSE Eurofirst 300 index up 0.63 percent, with the MSCI
world equity index up 0.36 percent. London's
FTSE 100 hit its highest point since May 2008 after
rising 1 percent.
Analysts expect better earnings in the fourth quarter over
the third, but lowered guidances are keeping outlooks modest.
"Clearly no one is expecting a stellar earnings season.
With the number of companies that lowered guidance over the last
few weeks, I think there's some concern that we could see
companies disappoint," said Kate Warne, investment strategist at
Edward Jones in St. Louis.
"However, based on the fact that many companies have lowered
guidance, that means they've put the bar so low they could crawl
over it, and I would expect what we'll see is some relief as
earnings come in."
Worries over Washington budget battles also remain a
constraint. A similar fight over the U.S. debt ceiling in 2011
caused the country to lose its sterling AAA credit rating,
rattling world markets.
Prices for U.S. government debt were near flat ahead of an
auction of $21 billion in 10-year notes. The benchmark 10-year
U.S. Treasury note was down 2/32, the yield at
Investors were pushing to retake some of last week's sharp
losses after Federal Reserve minutes hinted at growing unease
within the bank about its asset purchasing program.
German government bond prices also gained following a
successful auction of new five-year debt, continuing a string of
strong European sales this week with Austria, the Netherlands
and Ireland all tapping the market.
But a test for the market looms on Thursday when Spain and
Italy hold their first debt sales of 2013. The Spanish auction
could also offer clues on the timing of a much-anticipated
request by the government for international financial aid.
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 totaled 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 rallied against the yen, moving toward a 2-1/2
year high hit last week on expectations of bolder monetary
easing from the Bank of Japan at its next meeting later this
The U.S. currency was up 0.86 percent at 87.78 yen,
gaining 0.29 percent against a basket of currencies.
"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 $1.305, easing after
German industrial output rose less than expected in November.
The data was 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 0.57 percent to $111.30.
U.S. commercial crude oil stockpiles were expected to have
risen last week as refiners on the Gulf Coast resumed imports
after slowing shipments at the end of the year for tax purposes,
according to a Reuters poll.