* Wall Street falters as housing data casts negative pall
* Bonds mixed, housing data tempers optimism over recovery
* Strong German ZEW economic sentiment survey boosts euro
* Oil up slightly up as U.S. refinery fire adds support
(Updates with close of U.S. markets activity)
By Herbert Lash
NEW YORK, May 19 (Reuters) - Investors tried to brush aside
news of record-low U.S. housing data on Tuesday and anticipate
a recovery in global economies but U.S. stocks faltered on
concerns about the American consumer while oil rebounded on
supply fears.
Oil prices rose to touch a six-month high over $60 a barrel
as a flurry of U.S. refinery problems stoked fears of gasoline
supplies leading into the peak summer driving season.
The euro gained as improving business sentiment in Germany
spurred renewed optimism about the global economy, reducing the
demand for safe-haven assets such as the U.S. dollar.
U.S. Treasury debt was mixed as investors warmed to riskier
assets like stocks and as talk swirled that some U.S. banks
were preparing to repay the government for bailout funds.
U.S. stocks were higher through much of the session but
news that both new U.S. home starts and building permits fell
in April to their lowest levels since records for the data were
first collected almost 50 years ago helped erased those gains.
For full story, see []
"The U.S. economy still has big issues, and while the rest
of the world is still suffering, they may be better off than
us," said Peter Boockvar, equity strategist at Miller Tabak &
Co in New York.
"That's why U.S.-centric companies underperformed last week
and that's continuing into this week. All those that have
outside exposure, whether it's commodities themselves, or
emerging markets, they are performing better."
The Dow Jones industrial average <> closed down 29.23
points, or 0.34 percent, at 8,474.85 and the Standard & Poor's
500 Index <.SPX> fell 1.58 points, or 0.17 percent, at 908.13.
Technology shares bucked the wider trend in U.S. markets,
rising modestly. The Nasdaq Composite Index <> gained 2.18
points, or 0.13 percent, at 1,734.54.
A decline in financial shares was attributed to a new bill
passed by the the U.S. Senate on Tuesday to curb sudden credit
card interest rate increases and hidden fees.
The S&P financial index <.GSPF> fell 2.6 percent, while
JPMorgan Chase & Co <JPM.N> and American Express <AXP.N> were
the Nos. 1 and 3 biggest drag on the Dow. JPMorgan fell 3.9
percent and American Express dropped 5.1 percent.
The second-biggest drag on the Dow as Home Depot Inc
<HD.N>, which reported higher-than-expected quarterly earnings
as massive cost cuts offset weak sales. Its shares fell as
investors found the results disappointing in comparison with
those of smaller rival Lowe's Cos Inc <LOW.N>. []
Home Depot closed down 5.3 percent.
Shares of U.S. homebuilders initially fell, then rose and
finally closed lower on the U.S. housing data. The Dow Jones
home construction index <.DJUSHB> fell 0.75 percent.
European shares rose to their highest close in more than
four months, driven by optimism about a financial sector
recovery.
Also lifting regional shares was a closely-watched ZEW
survey showing German investor sentiment rose to its highest
level in nearly three years, underscoring various surveys
showing improvement in investor morale. []
"There is a very strong conviction now that recovery lies
ahead and that earnings are going to come through and it is not
going to budge until there is some real disappointing news
flow," said Mike Lenhoff, strategist at Brewin Dolphin.
The FTSEurofirst 300 <> index of top European shares
rose 1.2 percent to close at 872.09 points, its highest close
since Jan. 7.
U.S. crude <CLc1> settled 62 cents higher at $59.65 a
barrel, after earlier reaching $60.48 a barrel, the highest
level since Nov. 11. London Brent <LCOc1> rose 45 cents to
settle at $58.92 a barrel.
The gains came after a fire struck a gasoline-making unit
at a Flint Hills Resources' refinery in Corpus Christi, Texas,
that processes 288,000 barrels of oil a day. []
The fire followed an explosion on Sunday at Sunoco's
<SUN.N> oil refinery in Marcus Hook, Pennsylvania, that forced
the company to shut gasoline production and slow crude oil
processing. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 6/32 in price to yield 3.25 percent. The 2-year U.S.
Treasury note <US2YT=RR> rose 2/32 to yield 0.89 percent.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.53 percent at 82.10. Against
the yen, the dollar <JPY=> was down 0.18 percent at 96.07.
The euro <EUR=> rose 0.58 percent at $1.3634.
U.S. gold futures ended higher after the previous session's
losses on options-related buying and unexpectedly weaker U.S.
housing data.
Gold for June delivery <GCM9> settled up $4.1 at $925.80 an
ounce in New York.
Asian shares climbed to their highest level in seven months
on fresh hopes the global recession is easing. The MSCI index
of Asian stocks outside Japan <.MIAPJ0000PUS> rose 3 percent to
its highest since October, while Japan's benchmark Nikkei
average <> closed up 2.8 percent.
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http://blogs.reuters.com/globalinvesting. For the MacroScope
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