Asian stocks rebounded, bonds retreated and the dollar rose on Wednesday after solid earnings from key U.S. technology firms and moderately upbeat comments on the economy from Fed chief Alan Greenspan boosted Wall Street. Oil edged up to stand about $2 off a 21-year high of $42.45 a barrel, while gold was steady after falling nearly $5 in New York on the stronger dollar. Greenspan said on Tuesday in closely scrutinised testimony the U.S. economy had entered a sustainable expansion that should weather a June slowdown and was under no serious threat from inflation, allowing interest rates to rise at a measured pace. Technology stocks drove Asian stock markets higher as tech heavyweights Motorola Inc. and Texas Instruments reported solid earnings after the U.S. market closed.
Tokyo's Nikkei stock average <.N225> rose 1.4 percent to 11,418.59 by midday, lifted by a 4.2 percent jump in Advantest Corp. <6857.T>, Japan's top maker of semiconductor testing devices. Taiwan's main index <.TWII> jumped 2 percent, while its electronics sub-index <.TELI> climbed 3.2 percent
Technology heavyweights had taken a beating in recent days following a series of chip downgrades by several investment houses and some said U.S. stocks would struggle to rise further. "Wall Street's bounce and solid earnings are certainly a plus to the Tokyo market. But investors are still unconvinced that the U.S. market will keep on rising," said Masaharu Sakudo, an adviser at Tachibana Securities. MSCI's widest index of Asia Pacific shares outside Japan <.MSCIAPJ> rose 0.8 percent by 0218 GMT. Its tech component <.MSCIAPJIT> jumped 3 percent after falling sharply on Tuesday. Stock benchmarks rose 2.5 percent in South Korea <.KS11>, 1.4 percent in Hong Kong <.HSI> and about 0.4 percent in Australia <.AXJO> and Singapore <.STI>.
GREENSPAN UPBEAT
Greenspan's overall message on the economy, with just a few months left before the presidential elections, was upbeat. "Not only has economic activity quickened, but the expansion has become more broad-based and has produced notable gains in employment," he said. Currency traders said Greenspan, who is expected to make similar comments at a second congressional hearing later on Wednesday, appeared to reinforce expectations that U.S. interest rates would continue to rise. The euro fetched around $1.2314 compared with $1.2330 in late New York trade and just off a one-week low of $1.2300 touched shortly after Greenspan's comments. Against the yen , the dollar stood at around 108.55 yen, down slightly from around 108.69 in New York. Asian techs rose after Texas Instruments Inc. , the world's top maker of chips for cell phones, reported a four-fold jump in quarterly profit, with record revenue in its wireless business. Its shares rose 2.5 percent in after-hours trade. Another bright spot was Microsoft , which said it would return $75 billion in cash to shareholders over the next four years by buying its own stock, effectively doubling its annual dividend and issuing a special one-time dividend. Shares in the world's largest software maker shot up 5.6 percent after the bell. Shares in Motorola Inc. rose 5 percent in after-hours trade after it posted a net quarterly loss, but said sales surged and it won share from rivals in the global cell phone market. Taiwan Semiconductor Manufacturing Co. <2330.TW>, the world's largest contract chipmaker, surged 5.3 percent, while Samsung Electronics Co. Ltd. <005930.KS>, the world's biggest memory chip maker, climbed 3.2 percent in Seoul.
AU Optronics <2409.TW> rose 0.9 percent after slumping the daily seven percent limit on Tuesday following a downgrade by Merrill Lynch. Tokyo Electron Ltd. <8035.T>, the world's second-biggest maker of chip-making equipment, jumped 4.8 percent after falling 4.6 percent a day earlier. In U.S. equities, Greenspan's comments helped lift the Dow Jones industrial average <.DJI> up 0.5 percent and the tech-heavy Nasdaq Composite Index <.IXIC> up 1.8 percent. Japanese government bond prices fell, pushing the yield on the benchmark 10-year cash bond <0#JPTSY=JBTC> up three basis points to 1.780 percent. Oil edged up six cents to stand around $40.50 a barrel. Spot gold was at $401.25 an ounce, versus about $401.00 in New York.///