* German, French leaders voice strong support for euro zone
* Oil prices up for fourth day
* Italian, Spanish bond yields fall
* Global stocks rise for second day
By Rodrigo Campos
NEW YORK, July 27 (Reuters) – Stocks and the euro rose on
Friday and bond yields dipped in Spain and Italy on growing
expectations of European Central Bank action to tackle high
borrowing costs.
The markets received additional support as French and German
governments said they are “determined to do everything to
protect the euro zone.” The joint statement echoed comments one
day earlier by European Central Bank President Mario Draghi.
Expectations of that the Federal Reserve will act to support
the U.S. economy grew after data showed U.S. gross domestic
product expanded at a 1.5 percent annual rate from April through
June, roughly in line with lowered expectations.
“The Fed’s concern and mandate is employment. Annualized GDP
growth at 1.5 percent cannot begin to mend the unemployment
picture,” said Joseph Trevisani, chief market strategist at
Worldwide markets in Woodcliff Lake, New Jersey.
He said chairman Ben Bernanke and other Fed officials “have
all the rationale they need to open the liquidity spigot.”
In his statement Draghi appeared to target the bond market
as he said watching over ever-rising borrowing costs in certain
bloc members was within the central bank’s mandate.
Market expectations are high for another round of asset
purchases from the Fed, which in the past have sparked rallies
in equities and commodities. Markets are also beginning to price
in a move from the ECB, possibly in the form of bond purchases.
Both central banks hold separate meetings next week.
The Dow Jones industrial average rose 71.40 points,
or 0.55 percent, to 12,959.33. The S&P; 500 Index gained
8.65 points, or 0.64 percent, to 1,368.67. The Nasdaq Composite
added 16.97 points, or 0.59 percent, to 2,910.22.
The FTSEurofirst 300 was up 0.8 percent and an MSCI
gauge of global equities added 0.9 percent.
Copper prices rose 0.8 percent and Brent and
U.S. oil prices rose for a fourth day running.
The euro hit a three-week high versus the U.S. dollar, at
$1.2343, steering clear for now from a two-year low hit Tuesday
at $1.2040.
Ten-year Spanish bond yields hit a low of
6.731 percent, the lowest since July 17, while the Italian
benchmark bond yield dipped below 6 percent for
the first time in a week.
In line with a move towards riskier assets, the benchmark
10-year U.S. Treasury note was down 15/32, with the
yield at 1.4867 percent.
