Global stocks rose Wednesday after earnings from Apple Inc. and other U.S. companies easily beat expectations, providing a distraction from the economic and political turbulence in Europe over its debt crisis.
Apple again proved skeptics wrong by reporting blowout iPhone sales. The world's most valuable company sold 35 million iPhones in January through March, nearly twice as many as in the same period a year earlier. By beating expectations on iPhone sales, Apple comfortably beat analysts' earnings and revenue forecasts.
"Whilst Apple might not be a bellwether for economic activity generally it is probably fair to say that it is an important confidence indicator for the market as a whole, so these figures will help sentiment today," said Gary Jenkins, managing director at Swordfish Research.
The FTSE 100 index of leading British shares underperformed after figures showed the U.K. economy unexpectedly shrank 0.2 percent in the first quarter of the year, putting it back in recession — it was up only 0.3 percent at 5,725.
Despite the cheer provided by Apple, as well as companies like AT&T, markets are likely to remain nervous over developments in Europe's debt crisis.
Though a Dutch bond auction on Tuesday helped soothe market fears, investors remain edgy about how the crisis will develop over the coming weeks with general elections taking place in Greece and France. The Netherlands is also expected to go to the polls later in the year after its government collapsed on Monday over a failure to agree on an austerity package.
Later Wednesday, the focus is likely to shift to the latest policy statement from the Federal Reserve, which could well prompt traders to revise their expectations of how long U.S. borrowing costs will remain at their super-low level.
"There is risk that the Fed's economic projections will appear more optimistic than those in January," said Jane Foley, an analyst at Rabobank International.
Oil prices tracked equities higher, with benchmark oil for June delivery up 58 cents at $104.13 a barrel in electronic trading on the New York Mercantile Exchange.