* Wall Street jumps as G20 says cheap money to continue
* Oil jumps above $80 on hurricane fears, dollar weakness
* Dollar slides after G20 meeting; euro rises above $1.50
* U.S. bonds firm ahead of $40 billion 3-year note auction
(Updates with U.S. markets, changes byline, dateline
previously LONDON)
By Herbert Lash
NEW YORK, Nov 9 (Reuters) - Global stocks rallied on Monday
and gold surged to a record high above $1,110 an ounce after
Group of 20 policy-makers over the weekend pledged to keep
emergency economic aid in place until a recovery was assured.
The U.S. dollar fell across the board, lifting gold prices
and the euro above $1.50 after the G20 meeting and a U.S. jobs
data last week underscored the belief U.S. interest rates will
remain low for some time. See:[]
Oil rose to above $80 a barrel after Hurricane Ida forced
U.S. oil and gas production in the Gulf of Mexico to be shut as
stocks rose and the dollar fell. []
European shares hit a two-week closing high, boosted by
financial and commodity shares. U.S. stocks extended gains from
the previous week on renewed risk-taking sentiment following
the G20 meeting. [] []
Still, some analysts were skeptical about the strength of
the equity rally.
"It's basically the fact that we have free money right now,
basically we're re-inflating things and that is what's taking
place rather than evidence of a solid recovery," said Peter
Jankovskis, co-chief investment officer at OakBrook Investments
in Lisle, Illinois.
At 1 p.m., the Dow Jones industrial average <> was up
157.50 points, or 1.57 percent, at 10,180.92. The Standard &
Poor's 500 Index <.SPX> was up 18.00 points, or 1.68 percent,
at 1,087.30. The Nasdaq Composite Index <> was up 32.07
points, or 1.52 percent, at 2,144.51.
The FTSEurofirst 300 <> index of top European shares
rose 2 percent to end the session at 1,012.23 points, the first
time since Oct. 22 it has closed above 1,000.
Franz Wenzel, strategist at AXA Investment Managers in
Paris, said equities are still cheap, even after the bull rally
pushed global equity prices up over 50 percent from March
lows.
"The macroeconomic picture is getting better. The Fed is
indicating interest rates won't go higher for some time,"
Wenzel said.
G20 finance ministers pledged on Saturday to prepare for
the end of emergency support for their economies, but keep the
aid flowing until recovery was assured. []
Ida, the first real storm threat of the 2009 hurricane
season, was downgraded to Category 1, but only after U.S. oil
companies shut production and evacuated workers.
[]
"I think it's more buy on the rumour, sell on the fact. It
does not seem as if it's (Ida is) strong enough to create
structural damage," said Olivier Jakob of Petromatrix.
"Nothing fundamental has really changed, but you buy
because of the dollar and equities."
U.S crude for December delivery <CLc1> rose $2.71 to
$80.014 a barrel. London Brent crude <LCOc1> gained $2.60 to
$78.47.
Government debt prices rose on both sides of the Atlantic.
Euro zone government bonds rose on the view that banks will
be able to carry on buying assets with their excess cash in the
wake of the G20 meeting.
U.S. Treasury debt prices were steady to modestly higher
before a $40 billion auction of three-year notes, part of this
week's record $81 billion November refunding. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
3/32 in price to yield 3.49 percent.
The dollar index, the dollar valued against a basket of six
currencies, fell to a 15-month low amid the broad malaise
surrounding the dollar.
"The U.S. dollar is weaker against most major currencies
after the G20 voiced little concern about the FX market," said
Meg Browne, senior currency strategist at Brown Brothers
Harriman. "That gave a green light to sell the U.S. dollar and
take on risk."
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 1.04 percent at 75.031.
The euro <EUR=> was up 1.06 percent at $1.5005, and against
the yen, the dollar <JPY=> was up 0.08 percent at 89.98.
Spot gold prices <XAU=> rose $10.35, or 0.95 percent, to
$1105.00 an ounce.
Copper rallied as demand prospects brightened after Chile's
Codelco, the world's top copper miner, raised premium charges
for Asian customers in 2010. A weaker dollar also helped boost
industrial metals. []
Overnight in Asia, the MSCI index of Asia Pacific stocks
outside Japan <.MIAPJ0000PUS> rose 1.4 percent, while Japan's
Nikkei share average <> finished 0.2 percent higher.
(Reporting by Edward Krudy, Richard Leong and Nick Olivari in
New York; Brian Gorman and Barbara Lewis and George Matlock in
London; writing by Herbert Lash; Editing by Andrew Hay)
