Global stocks rebound after Portuguese bank scare

The Associated Press
FILE - This July 15, 2013 file photo shows the New York Stock Exchange in New York. Stock futures are climbing on Monday, July 14, 2014, as investors look to shake off the worst week for the stock market in three months. Citigroup's shares rose after it turned in better earnings and revenue than Wall Street expected. (AP Photo/Mark Lennihan, File)

LONDON (AP) — Global stocks rebounded Monday as jitters over a struggling Portuguese bank eased.

Last week, stocks around the world had one of their worst weeks in months partly amid concerns over Portugal's Espirito Santo International, which reportedly missed a debt payment last week.

The bank's problems reminded investors of the financial market turmoil that marked Europe's debt crisis. However, investors appear to have been reassured any problems would be contained.

"Equity indices have performed yet another hand brake turn this afternoon, bouncing back after a dismal performance last week and aided by good news from Citigroup," said Chris Beauchamp, market analyst at IG.

In Europe, Germany's DAX closed up 1.2 percent at 9,783.04 after the country's national football team beat Argentina 1-0 to lift the World Cup — Argentina's Merval, incidentally, was down 0.2 percent, a further indication of how a footballing defeat can depress the mood.

Elsewhere, France's CAC-40 rose 0.8 percent to 4,350.04 while Britain's FTSE 100 gained 0.8 percent to end at 6,746.14.

In the U.S., the Dow Jones industrial average was up 0.8 percent at 17,078 while the broader S&P 500 index rose 0.6 percent to 1,979.

Citigroup helped support the rally, rising 4 percent after the bank turned in better results than Wall Street expected. The bank also said it had reached a settlement in an investigation into its mortgage securities business.

Investors have a raft of central bankers to digest this week. Later Monday, European Central Bank President Mario Draghi addresses lawmakers in the European Parliament. On Tuesday, U.S. Federal Reserve Chair Janet Yellen is due to testify before a congressional committee.

"It is unlikely that the Fed chief will deviate from her long-standing dovish position, and it is probable that she will re-iterate her view that interest rates will remain low until the US economy is in a better position with regards to economic growth," said Neil MacKinnon, global macro strategist at VTB Capital.

Trading was particularly flat in the currency markets ahead of the testimony of Yellen, with the euro up 0.1 percent at $1.3619 and the dollar 0.3 percent higher at 101.58 yen.

Earlier in Asia, Tokyo's Nikkei 225 gained 0.9 percent to 15,296.82 and China's Shanghai Composite rose 1 percent to 2,066.65. Hong Kong's Hang Seng gained 0.5 percent to 23,346.67.

On Wednesday, China is due to report quarterly economic growth. The country's top economic official, Premier Li Keqiang, said last week that the economy's performance improved compared with the first quarter, when growth tumbled to 7.4 percent, but gave no details.