Shares rise on German growth, Greece optimism; oil rises

By Sam Forgione

NEW YORK (Reuters) – Stock markets worldwide rose on Friday on stronger-than-expected German economic growth data and optimism that Greece could reach a deal with its creditors, while oil prices gained on signs that excess supply may ebb.

Germany grew 0.7 percent in the fourth quarter, more than double the expected 0.3 percent rate, pointing to a stronger 2015 for the euro zone’s biggest economy.

The growth in Germany boosted the overall euro zone economy, which accelerated by 0.3 percent. Top European shares hit a seven-year high, while Germany’s DAX <.GDAXI> index hit a record high. U.S. shares nudged higher, with the benchmark S&P 500 <.SPX> index hitting an intraday record high.

Greek equities <.ATG> rallied nearly 6 percent as shares of Greek banks surged on signs the country could reach a deal with creditors.

A Greek government spokesman said the country will make every effort to reach a deal at Monday’s meeting of euro zone finance ministers on how to transition to a new support program.

“The big factor in the market is that hopes are building that we are probably looking at some agreement between the euro group and Greece, possibly as early as Monday,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Oil rose above $ 60 a barrel for the first time this year, supported by signs that deeper industry spending cuts may curb excess supply. Brent crude was last up $ 2.17 at $ 61.45 a barrel. U.S. crude was last up $ 1.94 at $ 53.15 per barrel.

The Dow Jones industrial average <.DJI> was last up 54.58 points, or 0.3 percent, at 18,026.96. The S&P 500 <.SPX> was up 5.7 points, or 0.27 percent, at 2,094.18. The Nasdaq Composite <.IXIC> was up 14.32 points, or 0.29 percent, at 4,871.93.

U.S. stocks largely took in stride data showing the biggest drop in U.S. import prices in six years and weaker-than-expected U.S. consumer sentiment.

In Europe, the FTSEuroFirst index of 300 leading shares <.FTEU3> was last up 0.66 percent, at 1,503.03. MSCI’s all-country world equity index <.MIWD00000PUS> rose 2.84 points, or 0.67 percent, to 427.53.

The dollar fell broadly for a second straight session, pressured by the weak U.S. data. The euro was steady against the dollar, on course for a third straight week of gains, its best performance in just under a year.

“The biggest risk to the dollar bull case is a shift in growth outlooks, and consensus forecasts combined with today’s European GDP release warn that this risk might be building,” said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.

The strong data out of Germany and optimism that Greece could reach a debt deal drove up German government debt yields, which in turn led U.S. Treasury yields higher. Benchmark 10-year Treasury yields were last at 2.02 percent, from 1.99 percent late Thursday.

The dollar’s weakness helped gold rise 1 percent, erasing a week of losses. Spot gold prices were last up $ 9.66 or 0.79 percent, to $ 1,231.86 an ounce.

(Reporting by Sam Forgione; Additional reporting by Lionel Laurent in London and Chuck Mikolajczak and and Gertrude Chavez-Dreyfuss in New York; Editing by Leslie Adler)