* U.S. stocks edge higher after see-saw session
* U.S. dollar at 2009 low vs basket of currencies, euro
* Oil slips from seven-month high on profit-taking
* U.S. government debt rises on bargain-hunting
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, June 2 (Reuters) - U.S. stocks advanced on
Tuesday after a spike in U.S. home sales bolstered hopes the
worst of the recession is over, and the U.S. dollar fell to its
lowest level this year versus major currencies as investor
appetite for riskier assets rose.
Oil slipped from seven-month highs as profit-taking
outweighed economic optimism following news that pending sales
of previously owned U.S. homes jumped 6.7 percent in April, the
biggest monthly gain since October 2001. []
Higher-yielding and commodity-linked currencies such as the
Australian and New Zealand dollars gained against the greenback
and benefited from the generally bullish tone in stocks market
in recent weeks.
"The overall sentiment in the market remains
dollar-negative," said Vassili Serebriakov, senior currency
strategist at Wells Fargo in New York.
"This whole story about a financial market recovery and
stabilization of the global economy has encouraged people to
take on more risk and buy commodity currencies essentially
against the U.S. dollar."
U.S. stocks see-sawed throughout the day, with the news on
housing sales buffeted by declines in financial shares 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 4.5 percent and AmEx fell 4.9 percent.
The equity offerings would be dilutive to shareholders,
decreasing their percentage ownership stake in the company.
The Dow Jones industrial average <> closed up 19.19
points, or 0.22 percent, at 8,740.63. The Standard & Poor's 500
Index <.SPX> was up 1.91 points, or 0.20 percent, at 944.78.
The Nasdaq Composite Index <> was up 8.12 points, or 0.44
percent, at 1,836.80.
Investors snapped up shares of home builders, with Toll
Brothers <TOL.N> rising 3.9 percent and DR Horton <DHI.N> up
4.1 percent. The Dow Jones home construction index <.DJUSHB>
gained 3.2 percent.
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. Analysts had forecast a
0.5 percent rise in pending U.S. home sales, which reflects
homes that are under contract to be sold.
"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," said David Morrison, market strategist at GFT
Global Markets in London.
Shares of big manufacturers also rose, with aircraft maker
Boeing Co <BA.N> , up 3.1 percent, the biggest contributor to
the Dow's advance. Exxon Mobil Corp <XOM.N> and Alcoa Inc
<AA.N> were the next biggest contributors on the Dow.
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 point 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.
U.S. crude <CLc1> settled 3 cents lower at $68.55 a barrel
after optimism about an economic recovery sent prices to $69.05
earlier, the highest level since early November. London Brent
crude <LCOc1> rose 20 cents to settle at $68.17 a barrel.
"I think basically we've been up seven days in a row and
we're seeing a little profit-taking just because of altitude,"
said Phil Flynn of Alaron Trading in Chicago.
Oil jumped 30 percent alone in May.
Gold edged higher as the dollar fell. The August contract
<GCQ9> settled up $4.40 at $984.40 an ounce in New York.
The dollar rose earlier in the global trading day,
recovering some of Monday's losses, but those gains later
eroded. The dollar was down against a basket of major
currencies, with the U.S. Dollar Index <.DXY> down 0.98 percent
at 78.40.
The euro <EUR=> rose 1.06 percent at $1.4314, and against
the yen, the dollar <JPY=> was down 1.06 percent at 95.54.
U.S. Treasury debt rose after earlier declines.
"The bond market was drastically oversold," said Jeff
Given, portfolio manager at John Hancock Funds in Boston.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
14/32 in price to yield 3.62 percent. The 30-year U.S. Treasury
bond <US30YT=RR> rose 26/32 in price to yield 4.47 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 0.01 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; Editing by
Leslie Adler)
