Shares gain on China stimulus; Greece worries weigh on euro
By Sinead Carew
NEW YORK (Reuters) - Equity markets rebounded on Monday after China took steps to stimulate its economy and Wall Street also rose on corporate earnings, while the euro weakened further on worries about Greece.
The Chinese central bank on Sunday cut the amount of cash banks must hold as reserves in its latest attempt to spur lending and combat a slowing economy. The news followed reports last week about a crackdown on margin lending there, which had sent global equity markets lower on Friday.
"It's primarily a snap-back rally from the very bad day Friday," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, citing the news out of China and U.S. corporate earnings.
"Earnings season seems less bad than expected," Tuz said, though he added: "It could change on a dime this week because this is the busiest earnings week."
Nearly 76 percent of the S&P 500 components that have reported results so far have topped analysts' earnings expectations, topping the 70 percent average in the last four quarters. But just 47 percent beat on revenue, compared with the 58 percent average.
The dollar rose as the euro was stung by gathering concerns that Greece could default on its debt or leave the single currency within months.
The European Central Bank's vice president said on Monday that a country that defaults would not have to leave the euro, in frank remarks about Greece that also touched on possible capital controls and showed how acute Athens' problems have become.
The euro was down 0.63 percent against the dollar in the late afternoon, deepening its decline as the day when on. The dollar was up 0.4 percent against a basket of major currencies. Continued...