* Global stocks rise to hit fresh six-month high
* Oil pushes above $62 a barrel on U.S. inventory data
* U.S. government debt little changed ahead of Fed minutes
* Dollar slumps to five-month low on view recovery near
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, May 20 (Reuters) - Global stocks jumped to a
fresh six-month high while the dollar slumped to a five-month
low on Wednesday as investors stuck to a growing view that the
worst of the global financial crisis had passed.
U.S. Treasury debt prices were near steady as the latest
round of Federal Reserve buying disappointed traders, who
awaited the release scheduled for 2 p.m. EDT (1800 GMT) of
minutes from the U.S. central bank's last meeting.
Euro zone government bond prices fell in thin trade, pushed
down by buoyant equity markets and a deluge of debt supply in
conventional bonds from Germany and France.
Oil prices briefly pushed above $62 a barrel to touch fresh
six-month highs on bullish inventory data and a spate of U.S.
refinery accidents, in spite of weak market fundamentals.
MSCI's main world stock index <.MIWD00000PUS> hit 245.32, a
new high for the year, reaching levels last seen in November.
The euro strengthened to its highest in more than four
months on hopes of economic recovery and after U.S. Treasury
Secretary Timothy Geithner said the financial system was
"starting to heal" after a period of severe trauma.
Geithner's comments were positive for risky trades as it
suggested that the financial crisis was abating.
Money flowed out of dollar-denominated deposits and back
into higher-risk assets.
"Overall, this is still a green-shoots rally. It's evident
in crude oil above $60, it's evident in stocks and it's to some
extent being driven by animal spirits," said Michael Woolfolk,
senior currency strategist at Bank of New York Mellon in New
York.
On Wall Street, stocks rose on bullish analyst comments
about McDonald's Corp <MCD.N> and Procter & Gamble Co <PG.N>,
while a successful share offering from Bank of America Corp
<BAC.N> stoked optimism about the outlook for the big banks.
McDonald's rose 4.3 percent after Deutsche Bank upgraded
the fast-food chain to "buy," and P&G Gamble Co <PG.N> added
3.1 percent after Barclays raised its rating to "overweight"
from "equal weight."
Bank of America gained 3.1 percent after it raised $13.47
billion in a stock sale as it works to meet capital-raising
requirements after a government stress test. For full story,
see [])
Shortly before 1 p.m. EDT, the Dow Jones industrial average
<> was up 6.85 points, or 0.08 percent, at 8,481.70. The
Standard & Poor's 500 Index <.SPX> was up 2.22 points, or 0.24
percent, at 910.35. The Nasdaq Composite Index <> was up
5.04 points, or 0.29 percent, at 1,739.58.
European shares extended a winning streak to five days in a
choppy session, with commodity stocks the major gainers as the
price of crude and metals rose.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.4 percent at 875.85 points. The index, which
slumped 45 percent in 2008, is about 35 percent higher from its
lifetime low on March 9.
"There is no particular strong news out there and investors
are asking what are the themes -- which is the oil price
ticking up today," said Philip Lawlor, a strategist with
Nomura.
"Investors still want to build positions in cyclicals as
they have been extremely oversold," he said.
The euro rose as high as $1.3795 <EUR=EBS> on electronic
trading platform EBS, the highest since early January.
Markets are now focusing on a move toward $1.40.
The dollar slipped against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 1 percent at 81.276.
Against the yen, the dollar <JPY=> traded down 1.06 percent
at 94.99.
U.S. crude oil and gasoline stockpiles fell sharply last
week, the Energy Information Administration said, with crude
down 2.1 million barrels and gasoline falling by 4.3 million
barrels from last week. []
"Week over week, the report is very bullish," said Phil
Flynn of Alaron trading in Chicago.
"There are still questions over the economy, whether these
prices can be sustained, which is why we will probably return
to the stock market to see if there are any signs of economic
help."
U.S. light sweet crude oil <CLc1> rose $1.28 to $61.38 a
barrel.
Gold surged to an eight-week high of $940.25 an ounce as
the dollar slid to multi-month lows against a basket of
currencies and oil rallied.
Spot gold prices <XAU=> rose $11.90 to $936.55 an ounce.
Most impetus for gold came from a slide in the dollar,
whose weakness boosts interest in gold as an alternative
investment to the U.S. currency and makes the metal cheaper for
holders of other currencies.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> was nearly unchanged while the Nikkei share
average <> edged up 0.6 percent despite the worst-ever
contraction in Japan's economy in the first quarter.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting. For the MacroScope
Blog click on http://blogs.reuters.com/macroscope; For Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
