* U.S. dollar, bonds rise on weak consumer confidence data
* BP's strong earnings lift Dow, S&P
* Volatility index rises, investors move to safer havens
(Updates with U.S. markets, changes byline, dateline; previous
LONDON)
By Manuela Badawy
NEW YORK, Oct 27 (Reuters) - The U.S. dollar and bonds rose
on Tuesday as investors moved into safer havens after data
showed U.S. consumer confidence deteriorated in October,
reviving worries over the pace of an economic rebound.
The U.S. dollar rose to two-week highs against the euro
while bonds surged, driving yields, which move inversely to
price, down from two-month highs.
U.S. stocks fell earlier in the day in choppy trade as the
report overshadowed data that showed home prices rising for the
fourth-straight month in August. For more see [].
Consumer confidence in the United States deteriorated as
the worst labor market in a quarter century increased concerns
over the likely extent of an improvement in the future.
"This report reminds us that the economic recovery will be
soggy at best unless the consumer starts to feel better and
spend more," said Cary Leahey, an economist at Decision
Economics in New York.
Consumers are the backbone of the U.S. economy, so a weak
confidence report bodes ill for the economic recovery because
it indicates restrained consumer spending.
The Conference Board's index of consumer confidence fell to
47.7 in October, weaker than the consensus expectation of a
reading of 53.1. Confidence was pressured on growing concerns
job market conditions would worsen in the near term.
[]
In mid-day trading, the euro was down 0.26 percent at
$1.4813 after touching $1.4787 <EUR=EBS>, its lowest since Oct.
13 and way below the $1.5064 hit on Monday, which was its
highest since August 2008.
The dollar index <.DXY>, a measure of its performance
against six other major currencies, rose to 76.323, a two-week
high, well above a 14-month low of 74.94 hit last week.
U.S. Treasuries extended gains on Tuesday following the
auction of $44 billion of two-year notes, part of this week's
record $123 billion supply of government bonds.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
18/32, with the yield at 3.48 percent, down from 3.55 percent
late on Monday.
Euro zone government bonds also rallied with Bund futures
on track for their biggest one-day gain in a month, on the back
of the weak U.S. consumer data that boosted demand for these
lower-risk assets.
STOCKS SEESAW
At 1:15 p.m. (1715 GMT), the Dow Jones industrial average
<> was up 16.33 points, or 0.17 percent, at 9,884.29. The
Standard & Poor's 500 Index <.SPX> was down 2.45 points, or
0.23 percent, at 1,064.50 and the Nasdaq Composite Index
<> was down 19.33 points, or 0.90 percent, at 2,122.52.
Earlier, better-than-expected third-quarter earnings from
British energy giant BP Plc <BP.L><BP.N> had lifted energy
shares. []
The Nasdaq fell after Chinese Internet search giant
Baidu.com <BIDU.O> reported quarterly revenue that missed
expectations.
Oil prices <CLc1> were up 0.3 percent to $78.92 a barrel.
"There is definitely a gathering bullishness around energy
at large, which is helping support things," said Matt Kaufler,
portfolio manager and equity analyst at Clover Capital
Management in Rochester, New York.
"If you believe the worst of the contraction is behind us,
you're going to see oil prices continuing to rise."
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.4 percent, supported by BP's report.
"BP is ahead of expectations which is good news, but we
have had a strong market environment which obviously helped,"
said Peter Dixon, economist at Commerzbank in London.
Meanwhile, the Chicago Board Options Exchange Volatility
Index <.VIX>, Wall Street's favorite barometer of investor
sentiment, shot up to its highest level in four weeks,
indicating worries about future losses.
This sentiment swept over into Tuesday trading with MSCI's
all-country world stocks index <.MIWD00000PUS> down 1 percent,
its emerging market sub-index <.MSCIEF> down 2.1 percent and
Japan's Nikkei <> closing down 1.45 percent.
(Additional reporting by Richard Leong, Leah Schnurr and
Gertrude Chavez-Dreyfuss in New York and Jeremy Gaunt in
London; Editing by James Dalgleish)
