* Global stocks falter after disappointing J&J results
* Dollar drops to 14-month low versus currency basket
* Government debt gains on soft stocks, economic weakness
* Oil rises for 4th day on demand outlook, weak dollar
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Oct 13 (Reuters) - The U.S. dollar slipped to a
14-month low on Tuesday, pushing gold to a record peak and
helping lift oil to a seven-week high on worries that U.S.
interest rates would remain at rock-bottom lows for some time.
Silver, platinum, palladium and rhodium also rallied to
multimonth highs as the slumping dollar fueled a surge in
precious metals. For more see []
Spot gold <XAU=> scaled an all-time high of $1,068.30 an
ounce, and oil reached a seven-week high of $74.47 a barrel.
An upward revision by the Organization of the Petroleum
Exporting Countries to its demand forecast for 2010 also helped
push oil prices above $74 a barrel along with the weak dollar.
[]
OPEC forecast a recovering global economy would boost
worldwide demand for crude by 700,000 barrels a day next year,
or 200,000 barrels more than it had previously forecast.
The euro <EUR=D4> climbed to near $1.49, its highest level
since August 2008, while the dollar fell to lows last seen then
against a basket of six major trading currencies <.DXY>.
Expectations of a stronger global recovery outside the
United States added to rising demand for commodity-linked
currencies such as the Canadian dollar and the Brazilian real.
Disappointing sales at Johnson & Johnson <JNJ.N>, a
component of the Dow Jones industrial average, pushed European
and U.S. stocks lower. J&J's third-quarter profit topped
forecasts, but largely because of cost cuts and lower taxes.
[]
A missed sales number at J&J sent a chill across Wall
Street, snapping a six-day rally for the S&P 500.
STOCK FUTURES FLY ON INTEL'S RESULTS
The next icon to release results was Intel <INTC.O>, the
world's biggest chip-maker, which reported earnings after the
close of regular U.S. stock market trading.
Index futures for all three major U.S. stock markets jumped
after Intel's results beat Wall Street's expectations.
With the last two quarters characterized by cost-cutting
and layoffs, investors have held out hope that companies begin
to show third-quarter revenue growth or improved outlooks.
"If the guidance is good, we can probably survive another
anemic topline growth quarter from most of the major
companies," said Alan Lancz, president of Alan B. Lancz &
Associates Inc in Toledo, Ohio.
The Nasdaq eked out a gain after Cisco Systems Inc <CSCO.O>
agreed to buy Starent Networks Corp <STAR.O> for $2.9 billion,
or $35 per share. [] Cisco shares rose 0.5 percent
to $23.89.
The Dow Jones industrial average <> fell 14.74 points,
or 0.15 percent, to close at 9,871.06. The Standard & Poor's
500 Index <.SPX> slipped 3.00 points, or 0.28 percent, to
finish at 1,073.19. The Nasdaq Composite Index <> edged up
0.75 of a point, or 0.04 percent, to close at 2,139.89.
U.S. Treasury debt prices jumped, recovering from the worst
sell-off in more than a month, as falling stocks and
suggestions of a sluggish economic recovery revived a safety
bid for bonds. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> shot
up 9/32 in price to yield 3.35 percent.
The appetite for Treasuries and other low-risk assets
re-emerged after a gauge of German investor morale unexpectedly
fell in October, adding to recent data that has tempered hopes
for a strong global recovery.
Gold held above $1,060 an ounce after setting a new record
as fears lingered over the outlook for the U.S. currency.
Spot gold prices <XAU=> rose $7.35 to $1,062.60.
"The trend in the dollar is lower, and that is going to be
the main focus," said Tom Hartmann, a commodity analyst at
California-based Altavest Worldwide Trading.
"The outlook for the dollar will be predicated on the Fed,
for one, hiking interest rates. But it doesn't look like that
is going to happen any time soon," Hartmann said.
U.S. crude <CLc1> rose 88 cents to settle at $74.15 a
barrel. London Brent crude <LCOc1> advanced $1.04 to settle at
$72.40.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.39 percent at 75.828.
The euro <EUR=> was up 0.37 percent at $1.4825, and against
the yen, the dollar <JPY=> was down 0.13 percent at 89.71.
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, Steven C. Johnson, Richard
Leong and Joshua Schneyer in New York; Atul Prakash, Harpreet
Bhaland and Ian Chua in London; Writing by Herbert Lash;
Editing by Jan Paschal)
