Stock markets climb on better-than-expected earnings

Italian spread stable despite Spanish-bond troubles

Stock markets climb on better-than-expected earnings

(ANSA) - Rome, July 19 - The Milan stock market closed higher on Thursday, like many European markets, buoyed by stronger-than-expected quarterly earnings. The FTSE MIB rose by 0.53% to close at 13,666 points while the FTSE Italia AllShare index rose by 0.55% to reach 14,732. Companies in the United States were responsible for much of the good news on corporate profits Thursday. Of the 63 companies in the Standard and Poor's 500 index that have reported to date, more than 70% have beaten analysts' forecasts and only 17% came in below estimates. Despite troubles in the Spanish bond market, Italy's benchmark bonds managed to maintain their spread with German equivalents. The spread between 10-year Italian and German paper, an important measure of investor confidence, narrowed slightly to end trading at 480 basis points, with a yield of 6.0% - below the previous day's closing of 489 points. Earlier Thursday, the Spanish Treasury sold 2.98 billion euros worth of notes, which was its target, but borrowing costs climbed as demand for its bonds weakened. That fanned some fears that a full-blown bailout may become necessary for Spain, where bond yields reached unsustainably high levels. The spread between Spain's 10-year bonds and those of Germany reached 571 basis points by end of day, with a yield of 6.93%. Still, Madrid's Ibex closed higher by 0.63% at 6,632.60 points, while in Paris, the CAC 40 gained 0.87% to reach 3,263.64 points. In other European markets, Frankfurt's Dax closed up 1.11% at 6,758.39 points; and London's FTSE 100 rose by 0.50% to 5,714.19 points.

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