* World stocks hit 15-months high first day of 2010
* Safe-haven dollar, bonds slip
* CRB commodity index touch 14-1/2 month high
(Updates with closing prices)
By Manuela Badawy
NEW YORK, Jan 4 (Reuters) - World stocks started the year
with a bang hitting a 15-month high on optimism the global
economic recovery is sustainable, while the safe-haven U.S.
dollar slid as investor risk appetite grew.
The weak dollar pushed energy and commodity prices higher
while safe-haven U.S. Treasury yields eased from near
seven-month highs.
The MSCI's all-country world stock index <.MIWD00000PUS>
rose more than 1.6 percent, a level not seen since October 2008
just after the collapse of U.S. investment bank Lehman Brothers
triggered financial turmoil. The Thomson Reuters Equity Global
Index <.TRXFLDGLPU> was up 1.57 percent at 130.58.
Investors got an early boost with U.S. manufacturing sector
data showing growth for a fifth straight month in December, its
best showing since early 2006, adding to hopes of a more robust
U.S. recovery in 2010. []
"This is for real, this is sustainable. You are starting to
see the rationalization of the economy coming around. Some of
the nay-sayers are starting to become believers and that's what
is happening," said Keith Springer, President at Capital
Financial Advisory Services in Sacramento, California.
"It's a Goldilocks economy because the Fed is promising to
keep interest rates low for at least the whole year which will
keep borrowing costs down ... if you can have that while the
economy starts to strengthen, then you are going to have a very
good rebound and a good rally in stocks," he added.
A Goldilocks economy is a not too hot or cold economy,
sustaining moderate economic growth with low inflation that
allows market-friendly monetary policy.
The Dow Jones industrial average <> rose 1.50 percent,
to 10,583.96. The Standard & Poor's 500 Index <.SPX> rose 1.60
percent, to 1,132.98 and the Nasdaq Composite Index <>
rose 1.73 percent, at 2,308.42.
DOLLAR DOWN, JOBS EYED
The U.S. dollar slid as investors hesitated to push it
higher against its peers ahead of Friday's U.S. non-farm
payrolls report. Payrolls have been in uninterrupted decline
since January 2008.
The single currency recovered to trade at $1.4408 from
earlier falls, which took it as low as $1.4258 and testing
December's low around $1.4218.
The dollar fell against a basket of trading-partner
currencies, with the dollar Index <.DXY> down 0.44 percent at
77.519. Against the Japanese yen, the dollar <JPY=> fell 0.48
percent at 92.55.
Market players will want to see an improvement to the high
unemployment that has battered consumer confidence and spending
in the United States. Consumer spending is the backbone of the
U.S. economy, accounting for two-thirds of activity.
Most economists think economic growth strengthened in the
fourth quarter, however it does not mean that companies which
cut to the bone to survive the deep recession, will in fact
re-hire as productivity remains high.
"Investors are squaring positions ahead of some key
numbers." said Omer Esiner, senior market analyst at Travelex
Global Business Payments in Washington.
"Obviously, the jobs number will headline this week's data
but we do have some numbers that will either confirm that a
U.S. recovery is gaining traction or could dampen some of the
recent enthusiasm that the dollar enjoyed."
The earnings season is to unofficially start on Jan. 11
with aluminum producer Alcoa, a Dow component, set to report
fourth quarter results.
COMMODITIES RALLY
The drop in the dollar and colder than normal temperatures
in the U.S. spurred a buying opportunity for crude oil <CLc1>
driving prices up 2.7 percent or $2.15 at $81.51 a barrel.
Gold <XAU=> rose 2.5 percent hitting a three-week high of
$1,123.4 an ounce, lifting other precious metals, with
palladium climbing to its highest since July 2008, and platinum
hitting a 16-month peak.[]
The Reuters-Jefferies CRB <.CRB> commodity index (a
benchmark basket of 19 futures), rose 2.10 percent touching a
14-1/2 month high.
Coming off its worst year in a decade and worst month in
more than five years, U.S. Treasury debt prices rose, with
benchmark 10-year U.S. Treasury notes <US10YT=RR> up 3/32,
yielding 3.82 percent versus 3.84 percent on Thursday, before
the New Year holiday.
Earlier in the trading day, the FTSEurofirst 300 <>
index of top European shares and Japan's Nikkei average both
hit 15-months closing highs on their first trading day of the
year.
(Editing by Andrew Hay)
