Wall Street recovers after 5-day fall, euro continues slide

U.S. equities rose the most in three weeks after a five-day fall on positive data and European shares rose on bets that worries of deflation would bring in the long-awaited stimulus sooner.

The Standard & Poor’s 500 had fallen 4.2% over the past five sessions and 2.7% since the start of the year, marking the worst start since 2008.

U.S. stocks opened higher after data showed a narrower-than-expected trade deficit and the private sector provided more jobs than forecast in December.

The S&P 500 Index was up 1.18% at 2026.20, the Dow Jones Industrial Average gained 1.09% to 17561.06, and the NASDAQ Composite Index added 1.17% to 4646.57 points. As of 17:57 GMT

Gains were extended after Chancellor Angela Merkel’s coalition in Germany said they are leaving the path clear for negotiations discussing debt relief with the government that emerges as a winner in Greece.

Most European shares ended the session higher before the statement came out, but Greece’s benchmark index, the ASE Index fell to its lowest level since 2012.

The Euro fell against the U.S. dollar to its lowest level in eight years after Eurozone inflation slowed more than expected last month, which sparked some optimism that the European Central Bank has a stronger case to start quantitative easing.

Consumer prices declined 0.2% in December, compared with estimates that called for a 0.1% decline.

U.S. light crude oil pared gains after data showed U.S. inventories climbed. Brent crude oil fell 0.22%, after having earlier fallen below the $50-a-barrel mark for the first time since $50.

Mintues from the Federal Open Market Committee`s (FOMC) last meeting is expected to provide further insight into the timing of the Federal Reserve`s upcoming interest rate hike, especially after the recent run of data that showed superiod growth in the U.S. economy compared to overseas economies.