Upbeat economic reports from Britain and Germany combined with surprisingly strong first-quarter earnings reports in the U.S. to foster a risk-on sentiment that lifted stocks and commodities while weighing on safe-haven investments.
German business confidence rose in April for the sixth consecutive month, and British retail sales rose 1.8 percent last month.
In the U.S., earnings season is off to a much better start than many had feared. Microsoft Corp. (NYSE: MSFT), McDonald's Corp. (NYSE: MCD), Honeywell International Inc. (NYSE: HON), Kimberly-Clark Corp. (NYSE: KMB), and General Electric Co. (NYSE: GE) all reported strong first-quarter results that surprised Wall Street.
Stocks. The Shanghai index closed higher, as did Hong Kong's main index, but Japan's and Singapore's dominant indexes closed lower. European stocks rose, with Germany's DAX gaining more than 1 percent. U.S. stocks recorded their first positive week this month. For the day, the Dow Jones Industrial Average and the S&P 500 rose, while the Nasdaq Composite fell.
Bonds. U.S. Treasury 10-year notes retreated for the first time since Tuesday, yielding 1.988 percent. Corporate bonds continued outperforming stocks: So far this month, the sector has returned 0.4 percent, while the global equity market has lost 2.4 percent. Rumors that a ratings agency planned a downgrade of France turned out to be false, which helped euro-zone debt.
Currencies. The dollar fell against the euro, and the British pound sterling continued its run. The Japanese yen fell on a monetary easing pledge by the country's central bank.
Commodities. Crude oil rose about 1 percent, and gold squeaked out a gain but still ended the week lower. Copper surged 1.9 percent on reports of low inventories. Lean hogs and live cattle fell, as did corn, sugar, and wheat. Coffee, soybeans, and lumber closed higher.