* S&P 500, Nasdaq rise on Microsoft, economy optimism
* U.S. dollar weakens as risk demand rises
* Government bonds rise on bargain-hunting before weekend
* Oil reverses gain as gasoline futures fall
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, June 19 (Reuters) - Global stocks rose and the
U.S. dollar fell on on Friday on hopes the world economic
downturn was nearing bottom after the latest data.
Oil prices rose initially as rebel attacks in Nigeria hit
output from the OPEC member, but later crude fell after
gasoline tumbled on increased supply.
The dollar fell but declines against the euro were limited,
with investors wary ahead of a Federal Reserve policy meeting
and the issuance of another record batch of U.S. government
debt.
U.S. Treasury debt prices rebounded from early losses on
bargain-hunting and as mortgage-related selling tapered off
before the weekend. Bonds had initially traded lower as gains
in Wall Street stocks and concerns about next week's debt
auction curbed safe-haven appetite for U.S. government debt.
Trading was light, making the market choppy, traders and
analysts said.
"It seems safe to dip your toes back into the market right
now," said Russ Certo, co-head of the rates group at BroadPoint
Capital in New York.
The International Monetary Fund is likely to revise its
2010 growth forecast for the world economy up with signs the
rate of decline in global output has moderated, an IMF first
deputy managing director said.
The IMF's John Lipsky, however, warned it was far too early
to declare victory, with financial conditions far from normal
and the world economy still in recession. []
Microsoft <MSFT.O> lifted technology shares after Goldman
Sachs added the software company to its Americas "conviction
buy" list. See []
Microsoft was a top gainer in both the Dow industrials and
the Nasdaq. The S&P information technology sector <.GSPT> rose
1.3 percent.
"It is a big move for a big company like Microsoft, (which)
can pull both software and hardware," said Janna Sampson,
co-chief investment officer at OakBrook Investments LLC in
Lisle, Illinois.
At 1 p.m., the Dow Jones industrial average <> was down
21.31 points, or 0.25 percent, at 8,534.29. The Standard &
Poor's 500 Index <.SPX> was up 1.11 points, or 0.12 percent, at
919.48. The Nasdaq Composite Index <> was up 16.45 points,
or 0.91 percent, at 1,824.17.
In Europe, banks and commodity stocks led the market
higher.
The FTSEurofirst 300 <> index of top European
companies closed 1.3 percent higher at 861.63 points.
The index, however, lost 2.7 percent this week -- the
second weekly loss since early March.
"The third quarter when we start seeing the earnings coming
through and the corporate statements that come with it will be
the most interesting time," said Philip Lawlor, chief portfolio
strategist at Nomura.
Lawlor said any indication from major companies that things
were not as bad as they had thought or order books were
starting to firm up would send the market higher.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.43 percent at 80.226.
The euro <EUR=> was up 0.45 percent at $1.3965. Against the
yen, the dollar <JPY=> was down 0.42 percent at 96.18
Government debt was higher. The benchmark 10-year U.S.
Treasury note <US10YT=RR> was up 1/32 in price to yield at 3.80
percent. The 2-year U.S. Treasury note <US2YT=RR> gained 1/32
in price to yield 1.24 percent.
U.S. light sweet crude oil <CLc1> fell 90 cents to $70.47 a
barrel after gasoline fell on data showing a large increase in
inventories.
Earlier, oil rose as Nigeria's main militant group MEND
said it had attacked a pipeline operated by Italy's Agip
<ENI.MI>. The action followed previous attacks on facilities
operated by Royal Dutch Shell <RDSa.L> and Chevron <CVX.N>.
Together, the attacks have cut at least 133,000 barrels of
daily output. []
Spot gold prices <XAU=> rose $1.05 to $933.40 an ounce.
Asian stocks snapped a four-day slide, with the MSCI index
of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> edged up
1.0 percent
(Reporting by Rodrigo Campos, Richard Valdmanis, Gertrude
Chavez-Dreyfuss, Richard Leong in New York; Dominic Lau and
Farah Master in London; writing by Herbert Lash; Editing by
Kenneth Barry)
