Optimism spread in global financial markets on Wednesday after a number of U.S. companies posted better than expected earnings for the first quarter of 2011, where leading companies from different sectors announced strong results, which led the Dow Jones Industrial Average to rise to the highest level since June 2008.
Moreover, data from the U.S. housing sector confirmed the improvement witnessed yesterday in the building permits and housing starts, where the existing home sales index was released on Wednesday to show that sales of existing homes rose above expectations, which encouraged investors to target higher yielding assets.
Stocks in the United States extended their gains on Wednesday to recover most of the losses acquired on Monday after rating agency S&P downgraded the outlook for U.S. debt to negative, where the Dow Jones Industrial Average was higher by nearly 1.40% to trade around 12,440, while the S&P 500 index was also up by 1.30% to trade around 1330. European shares also gained bank on Tuesday, where FTSE 100 was higher by 2%, and the DAX was up by more than 2.80%.
The U.S. dollar declined against most major currencies, where investors were more encouraged to invest in higher yielding assets, while gold prices slightly dropped back, where gold rose amid the dollar’s weakness to a new all-time record high at $1505.64 an ounce, while crude oil prices rose for a second day trading around $110.50 a barrel.
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