* World stocks edge higher as U.S. stocks pause
* Euro gains vs dollar, yen on stronger risk appetite
* U.S. Treasuries pulled lower by debt supply worries
* Oil near $68 after hitting highest since July 2
(Updates with U.S. markets activity, changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, July 27 (Reuters) - World stocks outside the
United States edged higher, but oil prices were steady on
Monday after U.S. housing data added to growing optimism that
the economy is pulling out of a deep recession.
The U.S. dollar fell to its lowest level in more than seven
weeks against a basket of currencies as the jump in U.S. new
home sales encouraged investors to take on more risk and dulled
the greenback's safe-haven appeal. []
Oil jumped at one point to the highest in more than three
weeks at almost $69 a barrel on hopes of a recovery that would
boost fuel demand, while copper surged to 10-month highs on
increasing optimism about growth. []
[]
Japanese stocks marked their ninth-straight gain in their
longest winning streak in 21 years, [] while energy
and mining stocks helped Britain's top share index to rise for
a record-equalling 11th straight session.
World stocks, as measured by MSCI's all country world index
<.MIWD00000PUS>, edged higher. Investors who took the view that
earnings will continue to be mostly positive led European
shares to their highest close in more than eight months.
[]
But U.S. indexes edged lower after a week that saw strong
gains in equities and disappointing reports from such companies
as Verizon Communications Inc <VZ.N> and Aetna Inc <AET.N>
[].
Verizon said second-quarter earnings fell from a year-ago
and that it would cut 8,000 jobs in its wireless business. The
stock fell 2.6 percent and was among the top drags on the Dow.
[]
Aetna shares shed 4.7 percent after it cut its full-year
outlook, citing higher-than-projected medical costs.
[]
The decline in U.S. stocks came after a week in which the
S&P 500 gained 4.1 percent, leading to some profit-taking,
analysts said.
"I think we've come a little too far," said Chip Hanlon,
president of Delta Global Advisors in Huntington Beach,
California. "The movement today is mostly a reaction to last
week's movement."
Shortly after 1 p.m., the Dow Jones industrial average
<> was down 23.27 points, or 0.26 percent, at 9,069.97. The
Standard & Poor's 500 Index <.SPX> was down 2.29 points, or
0.23 percent, at 976.97. The Nasdaq Composite Index <> was
down 9.08 points, or 0.46 percent, at 1,956.88.
The FTSEurofirst 300 <> index of top European shares
rose 0.5 percent to a provisional close of 911.58 points. The
index has gained in 10 of the last 11 sessions.
"The U.S. new home sales data was very positive and we
believe that we're seeing a base being formed in the U.S.
residential market," said Bob Parker, vice president of asset
management at Credit Suisse.
"And it's important because we shouldn't forget that the
U.S. housing market was one of the causes of the credit
crunch."
Sales of new single-family U.S. homes rose more than
expected in June, while the inventory of homes for sale fell to
a more than 11-year low, government data showed.[]
The dollar was down against the euro and mostly unchanged
against a basket of major currencies, with the U.S. Dollar
Index <.DXY> up 0.02 percent at 78.768.
The euro <EUR=> was up 0.14 percent at $1.4222, and against
the yen, the dollar <JPY=> was up 0.52 percent at 95.26.
The dollar has come under pressure in recent sessions as
upbeat economic data and largely positive results on the U.S.
corporate earnings front fueled expectations that the global
economy was on the mend.
"Though the housing market remains weak compared to the
peaks, the improved data will continue to feed into market
optimism on green shoots," said Win Thin, senior currency
strategist at Brown Brothers Harriman in New York.
Both the U.S. and Japanese currencies tend to fall when
risk appetite improves.
Gold rose to its highest level since mid-June as the weaker
dollar sparked fresh buying interest. []
Spot gold prices <XAU=> rose $3.00 to $953.35 an ounce.
"As long as the dollar remains under pressure due to
falling risk aversion, then gold should also go higher," said
Commerzbank analyst Carsten Fritsch.
U.S. Treasury debt prices fell, pushing benchmark yields to
the highest in more than a month as investors fretted over the
impact of a record-large amount of new government debt supply
this week. []
The Treasury will auction $115 billion of notes this week,
beginning with $6 billion in Treasury Inflation-Protected
20-year debt, which generated a fair response from investors.
Some investors are worried the global market may have
difficulty digesting the wave of new debt.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 18/32 in price to yield 3.73 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 3/32 in price to yield 1.0427
percent.
Asian stocks rose for the ninth day in 10, and Japan's
Nikkei share average <> rose 1.45 percent to a nine-month
high. MSCI's index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.6 percent.
(Reporting by Ryan Vlastelica, Wanfeng Zhou, Chris Reese in
New York; Brian Gorman, Ian Chua, Alex Lawler, Jan Harvey;
writing by Herbert Lash; Editing by Padraic Cassidy)
