* Stocks rise on strong earnings and M&A; Nasdaq falls
* Euro rises on higher interest rate concerns
* Oil up on supply worries, Egypt crisis
(Recasts, updates with U.S. markets, prices, changes
byline, dateline, previous LONDON)
By Manuela Badawy
NEW YORK, Jan 31 (Reuters) - U.S. stocks rose on Monday on
strong earnings and merger activity, overshadowing concerns
about the possible spread of unrest in Egypt which had caused a
sharp selloff in world stocks on Friday
The euro also recovered from Friday's weakness, helped by
concerns that economic growth and inflation in Europe might
result in interest rates rising in the region more quickly than
in the United States.
Europe's benchmark Brent crude oil remained just short of
$100 a barrel, though U.S. government debt prices slipped back
as investors turned to riskier assets despite concerns that the
political upheaval in Egypt could spread through to other parts
of the Middle East.
Gold extended losses after U.S. economic data showed
consumption beat expectations in December, while the Federal
Reserve's preferred gauge of inflation rose at its most
moderate pace on record.
The euro was supported by purchases made by Asian central
banks and Middle East accounts, while nervousness surrounding
the political crisis in Egypt is calming down "as far as the
currency market is concerned," said Brad Bechtel, managing
director of Faros Trading, managing director at FX advisory and
execution firm Faros Trading in Stamford, Connecticut.
European shares pared losses after Exxon Mobil Corp <XOM.N>
edged up 0.6 percent to $79.68 after the world's largest
publicly traded oil company reported a higher-than-expected 53
percent increase in quarterly profit. []
The pan-European FTSEurofirst 300 <> index of top
shares was up 0.07 at 1,144.55 points.
The Dow Jones industrial average <> was up 8.63 points,
or 0.07 percent, at 11,832.33. The Standard & Poor's 500 Index
<.SPX> was up 2.72 points, or 0.21 percent, at 1,279.06.
The Nasdaq Composite Index <> was down 6.20 points, or
0.23 percent, at 2,680.69 after Intel Corp <INTC.O> said on
Monday it cut its first quarter revenue forecast by $300
million due to the costs associated with correcting a design
flaw it discovered in one of its chips. The total cost to
repair and replace the chip is expected to be around $700
million, it said.
In currencies, the dollar was down against a basket of
currencies, with the U.S. Dollar Index <.DXY> down 0.57 percent
at 77.689, while the euro <EUR=> was up 0.69 percent at
$1.3707, and some traders expecting a move toward $1.40 in the
weeks ahead. Against the Japanese yen, the dollar <JPY=> was
down 0.11 percent at 82.01.
Protests to end the 30-year rule of Egyptian President
Hosni Mubarak continued over the weekend, heightening risk
aversion for European investors already concerned by the effect
their own region's sovereign debt crisis and inflation could
have on growth.
"Traders are concerned that with already rising inflation
and falling real incomes for consumers, a further rise in
energy prices could really dampen any consumer confidence and
prospects for growth," said Jonathan Sudaria, night dealer at
London Capital Group.
Benchmark Brent crude <LCOc1> was flat at $99.40 a barrel,
after hitting a 28-month high on Friday, while benchmark U.S.
crude <CLc1> futures were up 0.17 percent at $89.47.
Spot gold prices <XAU=> fell $4.74, or 0.36 percent, to
$1330.00 an ounce.
Treasuries softened after data showing consumer spending
rose by more than expected in December and that consumer
inflation was tame. The benchmark 10-year U.S. Treasury note
<US10YT=RR> was down 2/32, with the yield at 3.3372 percent.
The 2-year U.S. Treasury note <US2YT=RR> was down 1/32, with
the yield at 0.5541 percent. The 30-year U.S. Treasury bond
<US30YT=RR> was down 5/32, with the yield at 4.5452 percent.
(Reporting by Manuela Badawy, Steven C. Johnson, Chuck
Mikolajczak in new York and Simon Jessop and Amanda Cooper in
London)
