TOPWRAP 6-U.S. home sales another nudge to global economy

Published: 30 May 2009 17:20:23 PST

* Japanese exports rise month on month, helped by China

* U.S. existing home sales rose in April

* French, Swedish consumer confidence improve in May

* GM moves closer to bankruptcy, Sony ratings cut

* Moody's affirms US AAA rating despite debt

PARIS/WASHINGTON, May 27 - U.S. home sales picked up, Japan's exports rose in April for a second month and consumer confidence in France and Sweden improved, buoying hopes on Wednesday that the global financial crisis was easing.

The crisis has slowed economies and credit markets, hobbling firms such as General Motors Corp, which moved closer to becoming the biggest industrial bankruptcy in U.S. history.

The world's largest economy had another piece of positive news, following Tuesday's encouraging consumer confidence report.

The pace of sales of existing homes in the United States rose 2.9 percent in April, the National Association of Realtors said, supporting views that the three-year housing recession was near the bottom. Sales climbed to an annual rate of 4.68 million units from a 4.55-million pace in March, slightly higher than market expectations.

But the U.S. Mortgage Bankers Association had earlier said higher loan rates had hit refinancing, sending demand for mortgage applications to its lowest level since early March.

"I don't think I would go all the way to optimistic," said Thomas Kunz, chief executive of Century 21 Real Estate in Parsippany, New Jersey. "But when I see that the transactions are increasing, that is important."

Moody's Investors Service affirmed the AAA credit rating of the United States, soothing fears about the country's creditworthiness that have been creeping up in financial markets.

JAPAN EXPORTS UP

Japan, the world's second-largest economy, posted a month-on-month rise in exports due largely to third-ranked China, one of the few major economies seen growing in 2009.

Analysts said it was evidence Beijing's $585 billion stimulus package was helping, although China's central bank offered cautious words on a recovery and urged lenders to extend more credit to help its own exporters.

"Exports are likely to recover gradually from now on and the Japanese economy is expected to follow suit," said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

Sony Corp, a major exporter, has suffered in the downturn and Moody's downgraded the electronics giant, citing slowed economies, price declines and a strong yen.

In the latest Reuters economist poll, Japan's outlook improved, with its economy seen shrinking 4.0 percent this year from a previous estimate of 4.5 percent.

France, Europe's second-largest economy, posted a small rise in consumer confidence for May, with its index inching to minus 40 from minus 41 a month earlier. In Sweden, the index jumped to minus 11 from minus 21, beating estimates.

"We are in a period of slowing growth, even if the pace of the decline is easing, and therefore hopes of stabilization exist," European Central Bank Governing Council member Christian Noyer told the French Senate's Finance Committee.

CONFIDENCE

The more buoyant European outlooks came one day after U.S. consumer confidence rose to an eight-month high. The data cheered stock markets, dented bonds and helped oil hit a 2009 peak.

On Wednesday, Asian stocks were up, and European equities finished higher for a third straight session, boosted by financial and retail shares. U.S. stocks indices were mixed after investors digested the home sales report, although the Nasdaq rose on a semiconductor licensing agreement.

Oil topped $63 a barrel, although OPEC ministers are expected to leave the cartel's output unchanged at Thursday's meeting in Vienna.

Measures including massive spending by governments and central banks are buoying hopes that the first quarter was the downturn's worst, although the U.S. Federal Reserve recently lowered its outlook for the next three years and warned on unemployment.

Jobs are a worry globally. In the United States the woes of GM and other automakers remain front page news and April unemployment was the highest for over a quarter century.

A source familiar with GM's negotiations said on Wednesday there was no expectation of a bankruptcy filing this week, and that it was likely the timing of any next steps would be around the June 1 deadline Washington has set for an agreement on the auto giant's restructuring.

Spain's high unemployment means its economy will not face an easy year in 2010, Economy Minister Elena Salgado warned on Wednesday, and another senior government official called for labor reforms.