(Adds New York dateline, New York trading)
* World equities break 5-day losing streak
* Europe fiscal concern saps euro strength vs. dollar
* Year end profit-taking and volatility cited
By Al Yoon and Jeremy Gaunt
NEW YORK/LONDON, Dec 10 (Reuters) - World stocks broke five
consecutive days of losses on Thursday as U.S. economic reports
supported the theme of stronger growth in 2010, while the euro
slumped on fiscal worries.
European stocks rebounded strongly as some investors
reassessed risks from the region's more vulnerable economies.
Wall Street shares rose after the government said the U.S.
trade deficit unexpectedly shrank in October, indicating
businesses gained traction off the weaker U.S. dollar. In
another report, the four-week average for jobless claims fell a
14th week, even as initial claims edged higher in the last
period.
Despite gains on Thursday, investors globally have been
protecting profits and taking few risks before year-end. World
stocks as measured by the MSCI soared about 76 percent through
last week from March lows.
"You've had a tremendous movement this year, and you'll see
a continued battle between people putting away whatever they've
earned this year in profits and investors still thinking there
might be more room to run," said Rick Meckler, president of
LibertyView Capital Management in New York.
Rallies have been capped since November as investors debate
the prospects of growth in the U.S. amid expectations of high
unemployment, and in a climate of concern over creditworthiness
of various troubled economies.
Ratings agency Standard & Poor's on Wednesday warned that
Spain risks a debt downgrade in two years if the government
does not take tough action on its fiscal deficit.
Fitch Ratings has already downgraded Greece, while Moody's
cut the ratings of six Dubai-linked issuers after concluding
that no "meaningful" government support would be provided to
top firms such as DP World.
MSCI's all-country world stock index <.MIWD00000PUS>
increased 0.37 percent to 295.11, having lost about 3 percent
since hitting a one year-high a week ago.
The Dow Jones Industrial Average <> rose 68.40 points,
or 0.66 percent, to 10,405.45. The Standard & Poor's 500 Index
<.SPX> climbed 6.89 points, or 0.63 percent, to 1,102.84 and
the Nasdaq Composite Index <> increased 13.29 points, or
0.61 percent, to 2,197.02.
The pan-European FTSEurofirst 300 <> rose 1.04
percent.
REBOUNDING DOLLAR
The U.S. dollar gained against the euro as fiscal problems
in the euro zone increased safe-haven demand for the greenback,
overshadowing a narrower-than-expected U.S. trade deficit for
October and some improvement in U.S. jobless claims.
"Increased sovereign risk associated with the euro will see
some headwinds associated with the euro," said Omer Esiner,
senior market analyst at Travelex Global Business Payments in
Washington.
The U.S. Dollar Index <.DXY> edged higher by 0.08 percent
to 76.098. The euro <EUR=> fell 0.09 percent to $1.4711, and
the dollar rose 0.34 percent to 88.16 yen <JPY=>.
The Australian and New Zealand dollars both rose on growing
expectations of higher interest rates.
U.S. Treasury debt prices fell, pushing 30-year yields to
four-week highs at 4.47 percent as investors prepared to buy
$13 billion of the long-term debt. Yields on benchmark 10-year
Treasury notes rose 0.06 percentage point to 3.49 percent.
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> fell 60 cents, or 0.85 percent, to $70.07 per
barrel,, and spot gold prices <XAU=> fell $3.80, or 0.34
percent, to $1124.50.
(Additional reporting by Leah Schnurr, Atul Prakash and
Jessica Mortimer)
