World stocks rise on strong U.S. earnings

LONDON -- European and Asian stocks rose Tuesday ahead of expected gains on Wall Street as more U.S. third quarter corporate earnings beat market expectations.

Europe reversed earlier losses from investors taking profits after news Qatar's state-owned investment company will sell a $2 billion stake in Barclays.

Germany's DAX was up 0.3 percent at 5,867.81, Britain's FTSE 100 was 0.1 percent higher at 5,286.28 and France's CAC-40 gained 0.4 percent at 3,906.35.

Most Asian indexes closed higher, and U.S. benchmarks were expected to edge up again on the open to new 12-month highs. Dow industrials futures were up 0.4 percent at 10,052 while Standard & Poor's 500 futures were up 0.5 percent to 1,096.90.

Stocks had rallied on Monday on expectations of strong profits at technology bellwethers Apple Inc. and Texas Instruments Inc. and the companies delivered, beating analyst forecasts, when they announced after the Wall Street close.

On Tuesday, more good news came from Caterpillar Inc., which sounded confident about its outlook despite a drop in profits. Shares in the company were up as much as 5 percent after it said the latest quarter was its low point in the recession and raised its profit outlook for 2009.

Sentiment was also helped by chemicals maker DuPont and drugs maker Pfizer, which both said they boosted earnings by cutting costs, and investors will be looking ahead to figures from Internet company Yahoo Inc. later in the day.

Expectations for a rise on Wall Street helped European markets out of earlier losses.

Investors were cashing in on Monday's gains, spooked by the news that Qatar Holding was selling 379.2 million shares in Barclays, worth more than $2 billion.

Barclays shares were down 5.3 percent, while shares in J. Sainsbury PLC rose 5.3 percent on speculation Qatar may reinvest the cash in the supermarket chain.

Elsewhere, Adecco shares were down 3.9 percent after it announced it would spend $1.17 billion to buy Florida-based MPS Group Inc., one of the largest U.S. temporary staffers.

The dollar continued to drop, with the euro close to breaking through the $1.50 level. It traded at $1.4980, up from $1.4973 in New York Monday night. The dollar fell to 90.30 yen from 90.62 yen.

The weaker dollar continued to push oil prices up, extending a two-week rally to above $80 for the first time since last year. Being priced in dollars, commodities become cheaper -- and more attractive -- to international investors as the U.S. currency weakens.

Benchmark crude for November delivery hit $80.05 a barrel before falling back to trade lower by 2 cents at $79.59. The contract rose $1.08 overnight.

In Asia, Japan's Nikkei 225 index gained 1.0 percent to 10,336.844, and Hong Kong's index rose 0.8 percent to 22,384.96.

South Korea's main index added 0.6 percent to 1,659.15. China's Shanghai's benchmark climbed 1.5 percent and Australia's index advanced 1.1 percent. However, markets in Indonesia, Singapore and Thailand fell modestly.

Among this year's best preformers, Asian indexes have been pushing higher as the weakening dollar and immense liquidity lead foreign investors to channel funds into the region. Asia could see a "gold rush" toward the end of the year as investors who missed out on part of this year's run-up shift more money here, predicted Clive McDonnell, Singapore-based head of Asia strategy at BNP Paribas Securities.

"A lot of international funds have been underweight Asia and that has hurt them," McDonnell said. "As we head into the fourth quarter, the pressure is on to catch up."