* Global stocks falter after disappointing J&J results
* Dollar drops to 14-month low versus currency basket
* Government debt up on soft stocks, economic weakness
* Oil rises for 4th day on demand outlook, weak dollar
(Updates with U.S. markets, changes byline, dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Oct 13 (Reuters) - The U.S. dollar slumped to a
14-month low against a basket of other major units on Tuesday,
helping push gold to record peaks and oil to a seven-week high
amid renewed worries about low U.S. interest rates.
Silver, platinum, palladium and rhodium rallied to
multimonth highs as the dollar's slide, including a fall
against the euro to its lowest since August 2008, fueled a
surge in precious metals. For more see [].
The euro <EUR=D4> hit a high around $1.4875.
Expectations of a stronger global recovery outside the
United States added to rising demand for commodity- and
growth-linked currencies such as the Australian and Canadian
dollars.
Oil's rise was helped after the Organization of the
Petroleum Exporting Countries raised its demand forecast for
2010. OPEC forecast a recovering global economy would boost
world crude demand by 700,000 barrels a day next year, or
200,000 barrels more than it had previously forecast.
Disappointing sales at Johnson & Johnson <JNJ.N>, a member
of the Dow Jones industrial average, pushed European and U.S.
stocks lower. While J&J's third-quarter profit topped
forecasts, it was largely due to cost cuts and lower taxes.
[]
A missed sales number at J&J cooled the mood on Wall
Street. The next big company to release results is Intel
<INTC.O>, the world's biggest chip-maker, which reports after
U.S. markets close.
"If market players start to see that J&J is the norm,
they're not going to wait around for the news before selling,"
said Elliot Spar, market strategist at Stifel Nicolaus in
Shrewsbury, New Jersey.
"You can be thrown in both directions during this time of
the year simply because some of the company results are better
than expected and sometimes results have negative surprises,"
said Luc Van Hecka, chief economist at KBC Securities.
The Nasdaq was lifted by Cisco Systems Inc <CSCO.O>, up 0.6
percent after it agreed to buy Starent Networks Corp <STAR.O>
for $2.9 billion, or $35 per share. []
Shortly after 1 p.m. (1700 GMT), the Dow Jones industrial
average <> was down 10.13 points, or 0.10 percent, at
9,875.67. The Standard & Poor's 500 Index <.SPX> was down 3.10
points, or 0.29 percent, at 1,073.09. The Nasdaq Composite
Index <> was up 1.18 points, or 0.06 percent, at
2,140.32.
Financials were among the top losers in Britain and Europe,
with the FTSEurofirst 300 <> index of top European shares
finishing 1 percent lower at 995.42.
"The reporting season is going to be an important one
because the market will be looking at not just companies'
bottom lines but also the top line to see whether the recovery
may be sustainable," said Mike Lenhoff, chief strategist at
Brewin Dolphin.
U.S. Treasury debt prices rose, recovering from the worst
sell-off in more than a month, as falling stocks and signs of
economic weakness abroad reminded investors of the bumpy road
to recovery. []
Safe-haven Treasuries received support along with euro zone
government bonds after a measure of German investor morale
unexpectedly fell in October, adding to data that has tempered
hopes for a strong global recovery. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
16/32 in price to yield 3.33 percent.
A stronger euro lifted the euro zone's benchmark German
government bonds, with the short end outperforming longer-dated
maturities. []
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.38 percent at 75.836,
a 14-month low.
The euro <EUR=> was up 0.41 percent at $1.4831, and against
the yen, the dollar <JPY=> was down 0.11 percent at 89.73 yen.
U.S. light sweet crude oil <CLc1> rose 56 cents to $73.83 a
barrel.
Spot gold <XAU=> touched a peak of $1,068.30 an ounce, and
later was selling $7.25 higher at $1,062.50.
Overnight in Asia, Japan's Nikkei share average <>
rose 0.6 percent, and MSCI's index of Asia Pacific shares
outside Japan <.MIAPJ0000PUS> rose 0.4 percent.
(Reporting by Ryan Vlastelica, Nick Olivari, Burton Frierson
and Joshua Schneyer in New York and Atul Prakash, Harpreet
Bhaland and Ian Chua in London; Writing by Herbert Lash;
Editing by James Dalgleish)
