* S&P above 1,200 points, Dow positive for the year* Brent crude extends gains, Treasuries slide further* Spot gold off its intraday highBy Barani KrishnanNEW YORK, Oct 12 (Reuters) - Stocks climbed to three-week
highs on Wednesday and the euro rose to its highest in nearly a
month against the dollar after Slovakia reached a deal to
strengthen the euro zone rescue fund, boosting investor
confidence.On Wall Street, the S&P 500 traded above 1,200 for the
first time in three weeks, taking the benchmark near the upper
end of a range where it has been stuck since early August. The
S&P has gained over 13 percent from last week’s 2011 low while
the Dow industrials turned positive for the year.Brent crude oil rallied for a third straight day, helping the 19-commodity Reuters-Jefferies CRB index climb again after briefly posting losses earlier in the
session.Government bond prices fell, with 10-year U.S. Treasury
notes in a dismal auction as fewer investors took to
safe-havens amid a growing appetite for risk. Gold also
lost its safety appeal, with bullion trading around
$1,679 an ounce, off its intraday high above $1,691.Investor appetite for risk heightened after lawmakers in
Slovakia struck a deal to ratify more powers for the euro
zone’s rescue fund, effectively ending for now a crisis for the
euro, which also weighed on equities and other risky assets.Slovakia is the last country in the 17-member currency zone
left to approve the revamped European Financial Stability
Facility.”Europeans feel very comfortable that a plan has been put
in place with respect to their banks and Greece, and the EFSF
is going to solve the problem for now,” said Peter Boockvar,
equity strategist at Miller Tabak & Co in New York.Investors are also looking to the European Union to
announce a bank recapitalization plan designed to cushion the
impact any default by Greece could have on the region’s banks.”Markets are clearly still hoping for a comprehensive plan
to tackle the (euro zone) debt crisis. This may continue to
support the market over the next couple of months,” said
Philippe Gijsels, head of research at BNP Paribas Fortis Global
Markets.The euro extended gains, helped partly by surprisingly
strong data on the euro zone’s August industrial output.The euro rose 1.3 percent against dollar to
$1.38209 after it broke an options barrier at $1.3700. It
touched a high of $1.38340 on the EBS trading platform, its
strongest since Sept. 16.The euro also rallied against the yen , up more
than 2 percent, peaking at 107.06 yen, the highest since Sept
9.At 1:45 p.m. (1745 GMT), the Dow Jones industrial average was up 172.41 points, or 1.51 percent, at 11,588.71. The
Standard & Poor’s 500 Index was up 20.82 points, or 1.74
percent, at 1,216.36. The Nasdaq Composite Index was up
39.64 points, or 1.53 percent, at 2,622.67.Bank shares led the advance. Citigroup gained 5.4
percent to $29.33.The MSCI world equity index gained 1.9
percent to 299.57, its highest since Sept. 19. The benchmark
index is nearly 13 percent above a 15-month low hit just a week
ago.The broad FTSEurofirst 300 index of European stocks rose 1.6 percent to close at a nine-week high of
977.02 points.U.S. bonds extended losses after the Treasury auctioned $21
billion in 10-year notes. The benchmark Treasury note fell 28/32 in price, to yield 2.2565 percent, up
from 2.208 percent at Tuesday’s close.The 30-year bond lost three points in price,
yielding 3.24 percent, up from 3.19 percent on Tuesday.
