Shares gain as global economy fears ease; oil rallies

Fri Feb 12, 2016 5:09pm EST
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By Sam Forgione

NEW YORK (Reuters) - U.S. and European shares rebounded from recent weakness on Friday, with reassuring U.S. retail sales data boosting sentiment, while U.S. crude prices rallied from more than 12-year lows.

Banking shares in the United States and Europe spiked, with the S&P financial index .SPSY closing up 4 percent and the STOXX 600 Europe Banks index gaining 5.6 percent.

The U.S. S&P 500 .SPX gained about 2 percent after five days of losses that had dropped it to its lowest level in two years on Thursday, but still posted its second straight weekly decline.

In Europe, advances in shares of Deutsche Bank (DBKGn.DE: Quote) and its rival Commerzbank (CBKG.DE: Quote) of 11.8 percent and 18 percent, respectively, helped European stocks rebound.

The FTSEurofirst 300 .FTEU3 index of top European shares notched its biggest daily gain in five and a half months after hitting a two-and-a-half-year low on Thursday. The index ended up 3.04 percent at 1,232.09.

The S&P financial index has fallen more than 14 percent this year, and the European bank index nearly 25 percent, battered by intensified worries about the impact of central banks' negative interest rate policies on banks' profitability.

Commerce Department data showing U.S. retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 percent in January also boosted optimism.

"Europe was strong, especially the banks, and that appeared to have some positive carryover effect on banking stocks here in the U.S.," said John Carey, portfolio manager at Pioneer Investment Management in Boston.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) February 12, 2016. REUTERS/Brendan McDermid