* Wall St jumps as analyst Whitney's comments lift banks
* Dollar rebounds from five-month low vs yen; euro rallies
* Bond prices slide after record U.S. budget deficit
* Oil slips, analysts see further declines, target $55
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, July 13 (Reuters) - Global stocks snapped back on
Monday following positive comments on financial shares from an
influential bank analyst who is normally bearish, while the
U.S. dollar rebounded off a five-month low against the yen.
Prices of U.S. Treasuries, which had traded mixed, turned
lower after the U.S. government announced a $94.32 billion
budget deficit in June, a record for the month.
[]
Oil prices briefly touched their lowest level in almost two
months, slipping below $59 a barrel, on lingering concerns over
the global economy.
But copper prices and New York gold futures reversed
initial losses to trade higher, taking their lead from the
rally on Wall Street, which lifted stocks more than 2 percent.
Hopes that U.S. earnings may not be as weak as initially
feared sparked the stock rally and helped the euro to rise
broadly.
Wall Street analyst Meredith Whitney upgraded Goldman Sachs
Group Inc <GS.N> to "buy" and told New York-based business
television station CNBC that bank shares were in for at least a
short-term gain of 15 percent. Major financials, including Bank
of America Corp <BAC.N> and JPMorgan Chase & Co <JPM.N>, could
do well in the second quarter, she said.
The S&P Financial Index <.GSPF> gained 6.5 percent, while
Goldman rose 5.3 percent, Bank of America surged 9.3 percent
and JPMorgan climbed 7.3 percent.
European shares rallied, recouping some of last week's
steep losses, as banks tracked advances in U.S. financials.
"For today at least, people have optimism about the
earnings season," said James Meyer, chief investment officer of
Tower Bridge Advisors in West Conshohocken, Pennsylvania.
"I think what you're going to hear in the second quarter is
that earnings will be better than expected and management is
going to express some kind of optimism, though the top line
won't be very good," Meyer said.
The Dow Jones industrial average <> closed up 185.16
points, or 2.27 percent, at 8,331.68. The Standard & Poor's 500
Index <.SPX> gained 21.92 points, or 2.49 percent, at 901.05.
The Nasdaq Composite Index <> added 37.18 points, or 2.12
percent, at 1,793.21.
The FTSEurofirst 300 <> index of top European shares
closed up 2.0 percent at 830.19 points. []
The euro also gained after European Central Bank President
Jean-Claude Trichet sounded a bit more upbeat about euro-zone
growth for the rest of 2009.
The equity rally and Trichet's comments helped reverse
earlier gains for the yen and dollar, which tend to rise when
investors grow anxious and sell risky assets that often are
financed with cheaply-borrowed dollars and yen.
"We've had quite a turnaround here as people have received
some reassurance on earnings, though there are still hurdles
ahead," said Camilla Sutton, senior currency strategist at
Scotia Capital in Toronto.
The euro <EUR=> was up 0.44 percent at $1.3991.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.25 percent at 80.033.
Against the yen, the dollar <JPY=> was up 0.46 percent at
92.95.
U.S. crude oil for August delivery <CLc1> fell 20 cents to
settle at $59.69 a barrel. Earlier it fell to a low of $58.32,
the lowest since May 18. London Brent <LCOc1> rose 17 cents to
$60.69 a barrel.
Crude oil dropped 11 percent last week in its biggest
weekly decline since late January as investors raised the
possibility of another economic dip before any recovery, which
could delay a rebound in demand for fuel.
Many analysts remain cautious about the economic outlook,
saying that recovery could be protracted and difficult.
"There is a great deal of uncertainty," said Fairfax
investment bank analyst John Meyer, adding that the market was
seeking firmer direction. "There is clearly more negative news
to come out of the manufacturing industry."
The August futures contract for gold <GCQ9> settled up $10
at $922.50 an ounce in New York.
The rise in stocks eroded any safe-haven bid for government
debt, while the growing U.S. budget deficit ushered in fears of
future inflation, the bane of fixed-income investors because
rising prices erode the value of bonds and other debt.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 16/32 in price to yield 3.36 percent. The 2-year U.S.
Treasury note <US2YT=RR> was unchanged in price to yield 0.90
percent.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
4/32 in price to yield 3.31 percent. But the 2-year U.S.
Treasury note <US2YT=RR> rose 1/32 in price to yield 0.88
percent.
Asian shares fell 2.6 percent, with Japan's Nikkei down for
a ninth straight day, as concerns about company earnings
outlooks weighed. The Nikkei average <> fell 2.6 percent
to an eight-week low, MSCI's measure of stocks elsewhere in the
Asia-Pacific <.MIAPJ0000PUS> also fell 2.6 percent.
(Reporting by Ryan Vlastelica, Steven C. Johnson, Ellen
Freilich and Frank Tang in New York, Ian Chua, Dominic Lau,
Christopher Johnson, Rebekah Curtis and Kylie MacLellan;
writing by Herbert Lash; Editing by Leslie Adler)
