Global shares rally on Russia-Ukraine deal, Swedish QE surprise

Thu Feb 12, 2015 6:03pm EST
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By Herbert Lash

NEW YORK (Reuters) - Major U.S. and European equity indices rallied to multiyear or record highs on Thursday after a cease-fire between Russian separatists and Ukrainian forces, and surprisingly aggressive stimulus by Sweden's central bank, cheered global markets.

U.S. Treasury prices wavered as data showed a key measure of U.S. consumer spending barely rose in January and initial claims for state unemployment benefits rose more than expected, suggesting the economy started the first quarter on a softer note.

The Nasdaq Composite surged past multiyear highs reached in December to levels last seen in March 2000. The index was about 280 points from its all-time high set earlier that month marking the peak of the dot-com bubble. The benchmark S&P 500 closed just two points from its record closing high in December.

In Europe, shares reversed early losses on a broadly positive raft of results on one of the busiest days in the region's earnings calendar.

Even Greek stocks rose sharply, with the country's main index .ATG rising 6.7 percent as investors held out hope that the new Greek government could reach a deal with international creditors over the country's bailout.

Investors also took cues from the cease-fire in Ukraine that will take effect from Feb. 15, and the Riksbank's decision in Sweden to cut interest rates below zero and buy government debt.

"You have all these sort of overseas positives and two domestic negatives with the claims data and the retail sales data missing," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

The cease-fire deal came shortly after the International Monetary Fund announced a new four-year funding program for Ukraine that will total $40 billion.   Continued...

Traders works on the floor of the New York Stock Exchange February 12, 2015. REUTERS/Brendan McDermid