* Amazon, Expedia jump on higher-than-expected profits
* Lower-than-expected U.S. GDP leaves Fed easing door open
* Oil drops, but QE3 hopes limit losses
By Luciana Lopez
NEW YORK, April 27 (Reuters) – Global stocks on Friday
extended a rally on strong earnings reports, but the dollar slid
against the euro and the yen as weak U.S. economic data fueled
views that the Federal Reserve could ease policy further to
boost flagging growth.
U.S. stocks rose for a fourth straight session, helped by
stronger-than-expected profits at Amazon.com Inc and
Expedia Inc.
Shares of those companies jumped 14.98 percent and 24
percent, respectively, underscoring the importance of quarterly
profits in driving equities’ recent advance, even as data showed
the U.S. economy cooled in the first quarter.
“Earnings have been spectacular, and that’s a shot in the
arm to investors, but GDP is acting as a counterweight,” said
David Dietze, president and chief investment strategist at
Summit, New Jersey-based Point View Wealth Management.
“When coupled with other weak data, the ghost of a slowdown
starts to loom and that’s causing investors to pause a little
despite better-than-expected results from blue chips like
Amazon.”
The Dow Jones industrial average gained 33.61 points,
or 0.25 percent, at 13,238.23. The Standard & Poor’s 500 Index
was up 3.75 points, or 0.27 percent, at 1,403.73. The
Nasdaq Composite Index was up 18.93 points, or 0.62
percent, at 3,069.54.
The U.S. economy, the world’s largest, expanded at a 2.2
percent annual rate in the first three months of the year, below
economists’ expectations of a 2.5 percent pace.
The data was “certainly a bit of a mixed picture,” said
Camilla Sutton, chief currency strategist at Scotia Capital. “It
does open the door for the Fed to remain dovish.”
The possibility of more stimulus from the Fed weighed on the
dollar, which fell against the euro and the yen. The greenback
slipped 0.75 percent to 80.40 yen. The euro firmed 0.35
percent to $1.3254 against the greenback – well within
the $1.30 to $1.34 range in which the single currency has spent
much of the year.
While the Bank of Japan increased bond buying and made other
changes to its purchase program, the measures were seen as
incremental rather than significant steps to try to dig the
Japanese economy out of the doldrums.
The FTSEurofirst ended up 0.69 percent at 1,051.50,
with record first-quarter orders from Swedish engineering groups
Sandvik and Atlas Copco outweighing a
Standard & Poor’s downgrade of Spanish sovereign debt late on
T hur sday.
But the Spanish downgrade did push that country’s 10-year
debt yields briefly above 6 percent. Yields on Spain’s 10-year
bond later slipped to around 5.906 percent.
Data released Friday highlighted the extent of economic
weakness in the highly indebted country, with nearly a quarter
of the nation’s work force unemployed and retail sales falling
for the 21st consecutive month.
Italian yields were slightly higher, but nerves eased as
Italy sold 5.95 billion euros of new bonds without incident,
though at higher rates.
The benchmark 10-year U.S. Treasury note was up
3/32, the yield at 1.9348 percent.
U.S. crude oil futures turned positive in light volume
trading late on Friday, helped by short-covering ahead of the
weekend and rising for more Fed easing.
U.S. crude oil futures settled at $104.93 per barrel, up 38
cents, or 0.36 percent.
