Global stocks rose to their highest level in nearly two weeks on Wednesday as blockbuster results from major firms such as tech bellwether Intel Corp underpinned appetite for riskier assets.
Goldman Sachs and Intel posted solid results while Johnson & Johnson beat analysts' forecasts with a 5 percent fall in second-quarter earnings, getting the U.S. earnings season off to a bright start.
The news helped lift U.S. crude oil above $60 a barrel and drive three-month copper up 1.6 percent, but the dollar and less risky assets such as government bonds suffered.
Investors and policymakers are anxiously looking for signs of a pick up in U.S. demand, which is key to a solid global recovery.
World stocks as measured by MSCI <.MIWD00000PUS> rose 0.8 percent to 241.86, having earlier touched 241.93 -- a level last seen on July 2 -- and the emerging markets sector index <.MSCIEF> jumped 2 percent.
Intel shares surged 8.0 percent in Frankfurt , while the Nasdaq futures climbed up 1.5 percent.
In Europe, the FTSEurofirst 300 index of top regional shares was up 1.0 percent, rising for a third day running.
Japan's Nikkei average <.N225>, however, edged up just 0.1 percent, underscoring some concerns ahead of more earnings in the United States and Japan.
Despite positive Q2 results from Intel and Goldman Sachs ... equity markets posted only modest gains, with the focus shifting to worries about whether other U.S. banks reporting their Q2 figures this week will be as robust, said Stuart Bennett, senior FX strategist at Calyon in London.
Despite the underlying caution, investors gave government bonds a wide berth, sending the euro zone's benchmark yield up toward a two-week high near 3.35 percent.
U.S. Treasuries, however, found a steadier footing after the recent fall, with the 10-year yield retreating from Tuesday's high of 3.48 percent. Yields trade inversely to bond prices.
The reaction from preliminary earnings starting with Goldman Sachs yesterday led to a positive reaction in the stock market. On balance this is putting some weight on the govvie sector but this should remain relatively limited, said Patrick Jacq, interest rate strategist at BNP Paribas in Paris.
The dollar fell to a two-week low against a basket of currencies as investors sought higher-yielding units such as the Australian dollar.
The dollar index <.DXY> slipped 0.6 percent to its lowest since the start of the month, while the euro gained 0.5 percent to $1.4044. Against the U.S. dollar, the Australian currency rose a third of a percent to $0.7967.
The yen showed little reaction to the Bank of Japan's widely expected move to extend special corporate finance-support measures by three months, although some analysts were surprised that the extension was not longer.
(Additional reporting by Emelia Sithole-Matarise and Naomi Tajitsu; Editing by Toby Chopra)