World stocks hit a three-week high on Wednesday while government bonds fell broadly after Intel's forecast-beating quarterly results raised expectations of strong corporate earnings in the second quarter.
Resilient demand for PCs and servers helped Intel Corp's margin and revenue forecasts blast past Wall Street expectations, allaying fears of a technology spending slowdown and sending its shares up nearly 8 percent in pre-market trade.
Tuesday's upbeat news came after the closing bell on Wall Street, which rallied for a sixth straight day after Alcoa posted bullish results late on Monday.
European stocks pulled back in mid-morning trade though as banks lost ground as European regulators were due to finalize tough new bank capital and liquidity rules. But U.S. stock futures pointed to a firmer open on Wall Street as investors look to earnings from key U.S. firms such as JP Morgan and GE later this week.
We are momentum trading again driven on absolutely ridiculously low volumes ... but I don't think there is any doubt that ... (we have) corporate news and results that are good because companies are mean and lean and making profits, said David Buik, senior partner at BGC partners. The MSCI world equity index rose 0.2 percent to hit its highest level since late June. The Thomson Reuters global stock index <.TRXFLDGLPU> gained 0.3 percent.
The FTSEurofirst 300 index <.FTEU3> fell 0.4 percent.
Emerging stocks <.MSCIEF> rose 0.6 percent while emerging market spreads tightened further to 297 basis points, the tightest level since mid-May.
U.S. stock futures rose 0.3 percent but U.S. crude oil fell 0.6 percent to $76.71 a barrel after a weekly industry report showed a surprise increase in U.S. crude inventories.
Bund futures erased losses after Portugal's two-year bond issue saw strong demand after a spike in the yield.
The euro held near $1.27, within half a cent of the previous day's two-month high, as improving risk appetite boosted high-yielding currencies and investors welcomed a successful treasury bill tender by Greece on Tuesday.
The dollar <.DXY> held steady against a basket of major currencies. The market will look to the minutes of the U.S. Federal Reserve's June 22-23 policy meeting, due at 1800 GMT, on speculation policymakers may have discussed further easing measures.
(Additional reporting by David Brett; Editing by Susan Fenton)