Stocks in Europe, Wall Street rise as traders look for improved corporate earnings

European stocks rise as debt fears recede

LONDON — European and U.S. stocks rose Monday as investors looked past a downgrade of Ireland’s public debt and focused on improving corporate earnings, as market fears over Europe’s debt crisis seemed have eased for the moment.

Disappointing data in the U.S., including a plunge in consumer confidence last week, loomed larger as a source of background worry, suggesting the world’s biggest economy may be in danger of falling back into recession. That caused massive losses on Wall Street on Friday, but renewed interest from investors led to a mild rebound on Monday.

Britain’s FTSE 100 was up 0.6 percent at 5,188.93 and Germany’s DAX was up 0.5 percent at 6,070.31. France’s CAC-40 was 0.6 percent higher at 3,522.30.

U.S. indexes, which had slumped 2.5 percent on Friday, rose on the open. The Dow Jones industrial average was up 0.5 percent at 10,148.53 and the Standard & Poor’s 500 was up 0.5 percent to 1,070.42.

After strong earnings from Royal Philips Electronics NV and appliance maker Electrolux in Sweden, toy maker Hasbro and oil services company Halliburton also surprised markets with strong reports.

That partially eased worries about last week’s U.S. indicators — poor results from Citigroup Inc. and Bank of America Corp. and a slump in consumer confidence to its lowest point in nearly a year.

The increasingly troubled outlook for the U.S. has begun to overshadow fears from Europe’s government debt woes, as markets seem to feel the debt crisis has eased ahead of the release of bank stress test results this week.

In fact, the recovery from Friday’s sharp losses came despite a one-notch downgrade by Moody’s of Ireland’s public debt. The ratings agency cited a weak growth outlook, high debt levels and large banking liabilities. In another reminder of Europe’s debt crisis, officials from the International Monetary Fund and the European Union said they had suspended talks of another loan for Hungary.

Yet investors mostly looked past the reports, bidding the euro up to $1.2961 from $1.2947 in New York late Friday — a sign that fears about the debt crisis have largely calmed.

The publication on Friday of EU-wide stress tests of banks, a simulation to see how the region’s 91 biggest lenders would fare if the economy worsened sharply, will be European traders’ main focus this week.

“Although several European governments have suggested that the banks in their countries will pass the tests there is still a considerable event risk surrounding the announcement,” said Mitul Kotecha, analyst at Credit Agricole.

He said much will depend on how rigorous the tests are perceived to be.

In Asia, most indexes closed lower to make up for last week’s losses on Wall Street. Hong Kong’s Hang Seng index shed 159.21 points, or 0.8 percent, to close at 20,090.95. Australia’s S&P/ASX 200 lost 1.5 percent, Seoul’s Kospi closed 0.4 percent down and India’s Sensex was down 0.2 percent.

Markets in Japan were closed for a national holiday.

The Shanghai benchmark, however, rose — gaining 2.1 percent to 2,475.42 — on speculation that the Chinese government was committed to supporting the Agricultural Bank of China’s initial public offering to prevent it from dropping below its offer price.

In currencies, the dollar rose to 87.04 yen from 86.56 yen.

Benchmark crude for August delivery was up $.145 to $77.46 a barrel in electronic trading on the New York Mercantile Exchange.

Associated Press writer Pamela Sampson in Bangkok contributed to this report.