* U.S. stocks seesaw as investors weight Obama's home plan
* Dollar at six-week high vs yen, euro at three-month low
* Government debt falls on U.S. plan to stem foreclosures
* U.S. oil prices dip as demand falls and inventories rise
(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Feb 18 (Reuters) - U.S. stocks seesawed on
Wednesday, with big-cap technology shares rising while
government debt prices fell as investors worried about a huge
increase in public spending to shore up the slumping U.S.
housing market.
More dismal economic news bolstered the safe-haven bid for
the U.S. dollar, and U.S. oil prices fell below $35 a barrel on
renewed concerns about bloated crude inventories and falling
demand.
U.S. housing starts and building permits dropped to record
lows in January, data showed, as builders shelved construction
plans to try to clear a glut of unsold houses caused by
declining demand. For details, please see []
Further darkening the picture for an economy mired in a
13-month old downturn was U.S. industrial output, which shrank
more than expected in January. The measure of manufacturing
capacity being tapped hit its lowest level on record.
The new data came as U.S. President Barack Obama pledged up
to $275 billion to help stem home foreclosures, the latest step
in his multi-pronged efforts to lift the United States out of
recession. []
U.S. Treasury bond prices retreated on concerns about the
home foreclosure plan, which will double U.S. financial support
for mortgage-finance companies Fannie Mae and Freddie Mac.
[]
Trading on Wall Street was volatile, while shares in Europe
closed down for a third straight session as Obama's plan was
met with skepticism and fears of a deepening recession weighed.
[]
"I think it's now become crystal clear to market
participants there's going to be a lag time before any of the
stimulus, bank rescue and foreclosure proposals take effect,"
said Arthur Hogan, chief market analyst at Jefferies & Co in
Boston.
Just after 1 p.m., the Dow Jones industrial average <>
was down 18.47 points, or 0.24 percent, at 7,534.13. The
Standard & Poor's 500 Index <.SPX> was down 2.58 points, or
0.33 percent, at 786.59. The Nasdaq Composite Index <> was
off 0.22 point, or 0.01 percent, at 1,470.44.
The pan-European FTSEurofirst 300 <> index of top
shares fell 0.3 percent at 763.36 points.
Two-year benchmark euro zone government bond prices sagged,
pushing their yields off record lows as traders locked in
recent gains and as investors weighed the U.S. housing plan.
The two-year Schatz yield <EU2YT=RR> climbed 9.2 basis
points on the day to 1.264 percent, having earlier touched 1.15
percent -- the lowest since the introduction of the euro in
1999. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
16/32 in price to yield 2.71 percent. The 2-year U.S. Treasury
note <US2YT=RR> fell 6/32 in price to yield 0.96 percent.
The dollar rallied to a six-week high against the yen amid
growing worries about a steep contraction in Japan's economy
and the new efforts to tackle the U.S. housing crisis.
[]
The euro fell to a nearly 3-month low against the dollar as
concerns grew that a deep recession in Eastern Europe would
cause more damage to western European banks.
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.30 percent at 88.031. Against
the yen, the dollar <JPY=> was up 1.40 percent at 93.64.
The euro <EUR=> fell 0.32 percent at $1.2548.
U.S. crude <CLc1> prices fell.
U.S. light sweet crude oil <CLc1> was off 33 cents to
$34.60 a barrel.
"The crude market is still hanging on to the low end of its
range," said Tom Bentz, an analyst at BNP Paribas Commodity
Futures Inc. in New York.
Gold prices, which have jumped in recent sessions on
safe-haven buying, were mostly steady as investors took a step
back after bullion hit seven-month highs in earlier trade.
Spot gold prices <XAU=> edged $2.75 higher to $971.90 an
ounce.
Deepening economic gloom and fears about the global finance
sector earlier pushed Asian shares to their lowest level this
month.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> fell 0.6 percent after earlier touching its
lowest since Jan. 26. Japan's Nikkei average <> fell 1.5
percent to its lowest close in nearly four months.
(Reporting by Ellis Mnyandu, Pedro Nicolaci da Costa, Wanfeng
Zhou in New York; Lucia Mutikani in Washington and Joanne
Frearson, Emelia Sithole-Matarise and Chris Baldwin in London;
writing by Herbert Lash; Editing by Dan Grebler)
