GLOBAL MARKETS-Growth concerns, Spain cap euro and share gains

by on September 25, 2012 2:26 pm GMT

Tue Sep 25, 2012 10:26am EDT

* Stock markets rise, U.S. buoyed by stimulus expectations

* Brent oil hits $111 a barrel on Middle East tensions

(Reuters) – Stocks rose around the world
on Tuesday, with U.S. markets in particular buoyed by hopes of
more economic stimulus from the Federal Reserve, though
lingering concerns over Spain’s funding problems and renewed
worries about global growth limited gains.

U.S. stocks rose at the open after comments from the
president of the San Francisco Fed suggested the central bank
was not done taking action to stimulate the economy

A pessimistic outlook from Caterpillar capped gains
and some investors cautioned the advance may be due to window-
dressing for the end of the quarter.

U.S. stocks were supported by a private sector report
showing U.S. consumer confidence jumped to its highest level in
seven months in September as Americans were more optimistic
about the job market and income prospects.

The MSCI world equity index rose 0.37
percent to 337.38. European shares gained 0.26 percent.

“A lot of people are buying equities today because they’ve
been underexposed to the market. It isn’t necessarily a call on
fundamentals,” said Nicholas Colas, chief market strategist at
the ConvergEx Group in New York.

“Money managers who haven’t believed in the rally don’t want
to compound that error by showing a lack of exposure at the end
of the quarter.”

The Dow Jones industrial average was up 49.96 points,
or 0.37 percent, at 13,608.88. The Standard & Poor’s 500 Index
was up 4.83 points, or 0.33 percent, at 1,461.72. The
Nasdaq Composite Index was up 9.82 points, or 0.31
percent, at 3,170.60.

Caterpillar shares fell 2.3 percent at the New York
open. Just minutes before markets closed o n M onday, Caterpillar
Inc cut its 2015 profit outlook, warning that weaker commodity
prices would result in a bigger-than-expected decline in demand.

“Caterpillar is another global-reaching firm that’s speaking
negatively to the pace of the economy, and with slow-downs in
Europe and Asia, this is something we should get used to,” said
Art Hogan, managing director of Lazard Capital Markets in New

U.S. data showed single-family home prices rose for a sixth
month in a row in July, though the improvement was not as strong
as expected and had minimal impact on trading.

The benchmark 10-year Treasury note yield was
last at 1.7181 percent, compared with 1.706 percent shortly
before the release of the home price report from

The euro rose 0.2 percent at $1.2951, still some two
cents from the 4-1/2-month peak posted last week when the U.S.
Federal Reserve announced further quantitative easing. Gains
were sparked by a media report that Bundesbank lawyers were
checking the legality of the European Central Bank’s bond-buying

Oil drew some support from the rise in tensions in the
Middle East.

Washington on Monday cleared the path for tighter sanctions
against Iran to curb its nuclear ambitions, while Tehran renewed
its rhetoric against Israel, intensifying worries about a
conflict between the two, which could have an impact on crude
supplies from the region.

These worries sent Brent crude futures up 1 percent
to $110.91 per barrel.