* US dollar rises on mixed US data, higher yields
* US Treasury bonds fall amid sell-off before year-end
* U.S. stocks wallow awaiting direction
(Updates with US markets open, changes byline, dateline,
previous: LONDON)
By Manuela Badawy
NEW YORK, Nov 15 (Reuters) - The U.S. dollar rose broadly
and government bond yields rose, but stocks were little changed
on Monday after data showed U.S. retail sales posted their
strongest rise in seven months, though investors remained
concerned about European debt problems.
A rise in 10-year Treasury yields to a three-month high
pushed the dollar, with the Wall Street Journal reporting that
a group of Republican-leaning economists was launching a
campaign calling for the Federal Reserve to drop its plan to
buy $600 billion of Treasuries.
U.S. data showed sales at U.S. retailers rose more than
expected in October, suggesting the economic recovery was on
track, but a separate report showed a gauge of manufacturing in
New York State fell in November to its lowest since April 2009
after new orders and shipments tumbled. [] and
[].
"The recovery in the dollar had been driven by consistent
surprises in U.S. data over the past two weeks and the
disappointing Empire State survey reminded traders that the
recovery in the U.S. economy is still uneven," said Kathy Lien,
director of currency research at GFT in New York.
But she added that the dollar should recover its initial
losses as consumer spending is the primary driver of the U.S.
economy.
The dollar index <.DXY> was up 0.44 percent at 78.423 and
has now recouped all losses made after the Fed's Nov. 3
announcement for a second round of quantitative easing.
The euro <EUR=> slipped 0.5 percent to $1.3620, while the
dollar gained 0.44 percent to 82.87 yen <JPY=>, after having
earlier touched 83.28 yen on trading platform EBS.
Investors sold the euro as Ireland struggled to convince
them it was in control of its debt problems, leaving open the
possibility of a bailout. []
The euro has taken a hit in the past week as Irish bond
yields have jumped on the country's struggles to control its
spiraling debt.
The debt-laden country is fully funded for 2010, but Irish
press reports on Monday said it was considering asking for
money for its banks, and other European governments were keen
to avoid a contagion to other peripheral countries.
STOCKS AWAIT DIRECTION
U.S. stocks were trading steady in positive territory as a
pair of large acquisition proposals was offset by weakness in
Internet shares.
The Dow Jones industrial average <> was up 44.31
points, or 0.40 percent, at 11,236.89. The Standard & Poor's
500 Index <.SPX> was up 3.88 points, or 0.32 percent, at
1,203.09. The Nasdaq Composite Index <> was up 3.87
points, or 0.15 percent, at 2,522.08.
Caterpillar Inc <CAT.N> agreed to buy mining equipment
maker Bucyrus International Inc <BUCY.O> for $7.6 billion,
sending Bucyrus' shares up 29 percent to $89.91. Caterpillar, a
Dow component, rose 0.6 percent to $81.53. For details, see
[]
The FTSEurofirst 300 <> index of top European shares
was up 0.4 percent and Japan's Nikkei <> closed up 1.1
percent, near a 4-1/2 month high hit last week, helped by
better-than-expected Japanese growth data for the third
quarter.
MSCI's all-country world stock index <.MIWD00000PUS> was up
0.1 percent, and their emerging market index was down 0.56
percent.
Persistent concerns that China will raise interest rates
further also spurred selling of riskier assets as traders
worried policy tightening will curb the world's second-largest
economy's robust demand for commodities and other imports.
A wide-raging barrage of criticism of the Fed's monetary
policy from countries such as Russia and China to some
Republican lawmakers and economists reinforced the inclination
to sell Treasuries and take profits before yearend, traders
said.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 18/32, with the yield at 2.8491 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 1/32, with the yield at
0.5237 percent. The 30-year U.S. Treasury bond <US30YT=RR> was
down 16/32, with the yield at 4.321 percent.
The Fed is expected to buy $7 billion in debt maturing in
seven years on Monday. The Fed bought $7.23 billion in Treasury
paper maturing in four to six years on Friday, the first of
$600 billion in asset purchases the U.S. central bank said it
would make to try to boost both employment and inflation.
In energy and commodities prices, crude oil <CLc1> rose 46
cents, or 0.54 percent, to $85.34 per barrel, and spot gold
prices <XAU=> rose $4.67, or 0.34 percent, to $1373.00 an
ounce, steadying after its biggest one-day fall since July 1
the previous session.
The drop from last week's record $1,424.10 was on concern
the market had become overbought and as talk of a potential
interest rate rise in China knocked commodities sharply lower.
(Additional reporting by Wanfeng Zhou, Ellen Freilich, and
Ryan Vlastelica in New York and Michael Rose in London)
