* European stocks post biggest 1-day gain since July
* Gold hits record above $1,200 an ounce as dollar slides
* Oil rises more than $1 a barrel on upbeat China outlook
* Bonds fall as receding Dubai fears halt safe-haven rally
(Updates with U.S. markets, changes byline, dateline
previously LONDON)
By Herbert Lash
NEW YORK, Dec 1 (Reuters) - Global stocks surged and crude
rose on Tuesday on upbeat economic news from around the world
and as fears eased that Dubai's debt woes could rekindle a
credit crisis and choke improving economies.
European stocks posted their biggest single-day gains since
July 15, while U.S. stocks jumped as data reassured investors
about the health of the battered U.S. housing market,
considered a big drag on a long-term recovery. For details, see
[][][]
Gold hit record highs above $1,200 an ounce and copper rose
to a 14-month high as China's positive data, a weaker U.S.
dollar and easing fears of default contagion from Dubai
overshadowed a mixed batch of U.S. economic data.
[][].
Crude oil climbed toward $79 a barrel, lifted by the weaker
dollar and news that China is ending the year on a strong note,
laying the foundations for solid expansion in 2010.
[][].
The euro zone's manufacturing sector grew in November for
the second straight month, at a faster rate than expected, and
car sales data for the month suggested a strong year end in
major European markets. [][].
While questions remain about the staying power of an
incipient recovery, the U.S. manufacturing sector grew for the
fourth straight month in November, albeit at a slower pace.
[]
Investors' nerves were soothed by Dubai World's plans to
restructure about $26 billion in debt, signaling the emirate's
debt problems can be contained. [].
"What doesn't kill you makes you stronger in this
environment," said David Kelly, chief market strategist at
JPMorgan Funds Management Inc in New York. "The probable is the
economy recovers and is going to push stocks higher."
The economic data and easing worries about Dubai boosted
risk appetite and the share price of banks and commodity
stocks.
The FTSEurofirst 300 <> index of top European shares
rose 2.6 percent to close at 1,011.06 points, while the FTSE
100 <> closed up 2.3 percent at 5,312.17.
Banks led the rally, having been hit in recent days by
worries over exposure to Dubai.
James Hughes, market analyst at CMC Markets, said unease
over Dubai "may well be winding down" but added, "Caution will
remain as the potential for more surprises still remains."
In New York at 1 p.m., the Dow Jones industrial average
<> was up 124.09 points, or 1.20 percent, at 10,468.93. The
Standard & Poor's 500 Index <.SPX> was up 13.18 points, or 1.20
percent, at 1,108.81. The Nasdaq Composite Index <> was up
32.59 points, or 1.52 percent, at 2,177.19.
Business surveys in China showed that the world's
second-largest energy consumer has largely recovered from the
global economic downturn, giving crude oil a boost.
U.S. light sweet crude oil <CLc1> rose $1.43 to $78.71 a
barrel.
The rally in gold was propelled by a weaker dollar, with
COMEX February gold <GCG0> rising as high as $1,204 an ounce, a
record. Spot gold <XAU=> rose $18.55 to $1197.00 an ounce.
The dollar slid after an interest rate hike in Australia
and the yen weakened broadly after the Bank of Japan announced
more monetary policy easing.
The U.S. Dollar Index <.DXY> down 0.67 percent at 74.378.
The euro <EUR=> was up 0.58 percent at $1.5094, and against
the yen, the dollar <JPY=> was up 0.30 percent at 86.60.
In Europe, shorter-dated euro zone government bond prices
pushed higher, gaining support after the Bank of Japan said it
would pump more cash into the banking system and from year-end
flows. []
U.S. government bond prices fell, pulling benchmark yields
up from recent eight-week lows. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 12/32 in price to yield 3.24 percent.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> rose 0.9 percent, and the Nikkei <>
rallied 2.4 percent on hopes for more growth boosting
measures.
(Reporting by Ryan Vlastelica, Gertrude Chavez-Dreyfuss,
Edward McAllister and Burton Frierson in New York; Brian
Gorman, Harpreet Bhal, Jan Harvey, Pratima Desai and Maytaal
Angel in London; writing by Herbert Lash; Editing by Kenneth
Barry)
((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters
Messaging:
herb.lash.reuters.com@reuters.net))
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