* Wall Street teeters as financial sell-off weighs
* US dollar hits fresh 2009 low vs basket of currencies,
euro
* Oil slips from seven-month high on profit-taking
* U.S. government debt slips after turning higher
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, June 2 (Reuters) - World stocks faltered and the
U.S. dollar fell on Tuesday to its lowest level this year
versus the euro and other currencies after a report showing a
jump in U.S. pending home sales bolstered the belief the global
economy is on the mend.
U.S. and European shares pared gains to trade flat in a
sell-off of financial shares, while U.S. Treasury bond prices
see-sawed in line with stocks.
Oil prices fell on profit-taking a day after jumping to a
fresh seven-month high, while world equity markets struggled to
hold onto their 2009 high seen on Monday.
"At some stage the market has got to consolidate and pull
back. We had a very big run-up yesterday," said David Morrison,
market strategist at GFT Global Markets in London.
U.S. pending home sales, based on contracts signed in
April, rose 6.7 percent in the latest data that buttressed
views the U.S. recession is easing. Analysts had forecast a 0.5
percent rise. For details see [].
The National Association of Realtors said its Pending Home
Sales Index rose to 90.3 from 84.6 in March, taking the index
3.2 percent above its year-ago level.
"The collapse of the housing market was the catalyst for
the financial crisis, so this stronger number will add to the
increased optimism that is flowing through the stock markets at
the moment," Morrison said.
Shares of home builders rose on the data, with the Dow
Jones U.S. Home Construction index <.DJUSHB> adding 2.3 percent
and the SPDR S&P Homebuilders ETF <XHB.P> gaining 2.8 percent.
But declining financial shares limited gains on Wall
Street, after several companies, including Dow components JP
Morgan Chase & Co <JPM.N> and American Express Co <AXP.N>, said
they will sell new stock as they attempt to raise capital to
repay money received under the government's bailout plan.
JPMorgan fell 3.4 percent and AmEx fell 5.2 percent.
The equity offerings would be dilutive to shareholders,
decreasing their percentage ownership stake in the company.
At 1 p.m. (1700 GMT), the Dow Jones industrial average
<> was up 6.19 points, or 0.07 percent, at 8,727.63. The
Standard & Poor's 500 Index <.SPX> was up 0.31 points, or 0.03
percent, at 943.18. The Nasdaq Composite Index <> was up
3.74 points, or 0.20 percent, at 1,832.42.
In Europe stronger auto shares struggled to negate the
impact of weaker banks, which were led lower by Barclays after
Abu Dhabi sold more than 11 percent of the lender's shares.
The FTSEurofirst 300 <> index of top European shares
closed down 0.39 points at 885.88. The index has jumped 37
percent since hitting a lifetime low in early March.
Barclays <BARC.L> slipped 13.5 percent after Abu Dhabi's
International Petroleum Investment Co sold a stake in the bank,
reaping a $2.5 billion profit in just seven months.
"There is some profit taking, but equally there are pockets
in the market where you have got fairly sharp appreciation
going on," said Jonathan Lawlor, head of European research at
Fox-Pitt, Kelton.
In the oil markets investors also sold contracts to lock in
profits from Monday's price jump, but prices creeped higher in
early afternoon trade.
"There was a huge jump in prices in the past couple of days
so we are seeing profit-taking now. There are some technical
indices showing the market has been overbought," said Andy
Sommer, an oil analyst with EGL AG in Switzerland.
Oil has moved up steeply from lows below $33 in December.
U.S. light sweet crude oil <CLc1> was up 8 cents to $68.66
a barrel.
Gold also edged higher as the dollar fell to 5-1/2 month
lows. Spot gold prices <XAU=> rose $6.45 to $980.65 an ounce.
The dollar recovered some of Monday's losses earlier in the
global trading day, but those gains later eroded. The dollar
was down against a basket of major currencies, with the U.S.
Dollar Index <.DXY> down 0.78 percent at 78.56.
The euro <EUR=> rose 0.87 percent at $1.4287, and against
the yen, the dollar <JPY=> was down 0.81 percent at 95.78.
U.S. Treasury debt fell. The benchmark 10-year U.S.
Treasury note <US10YT=RR> was down 3/32 in price to yield 3.69
percent. The 30-year U.S. Treasury bond <US30YT=RR> was down
2/32 in price to yield 4.54 percent.
Improving global manufacturing data lifted Asian shares
overnight near levels before the collapse of Lehman Brothers in
September, but the pace of gains slowed as investors pondered
how much longer a heady three-month rally will last.
Japan's Nikkei stock average <> closed up 0.3 percent,
and MSCI's index of Asian stocks outside Japan <.MIAPJ0000PUS>
rose 0.5 percent.
(Reporting by Chuck Mikolajczak, Nick Olivari and Chris Rees
in New York; Ikuko Kao, Atul Prakash, George Matlock and
Kirsten Donovan in London; writing by Herbert Lash)
