* Stocks rise on hopes U.S. stimulus will spark recovery
* Record issuance concerns hit U.S. government debt prices
* Oil rises ahead of stimulus passage, OPEC threat ignored
* Dollar weakens across the board as safety bid weakens
(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Feb 9 (Reuters) - Equity and crude oil markets
rose on Monday as a flight to safety eased in anticipation the
U.S. Congress will pass an $800 billion economic recovery plan
and help restore confidence in battered financial markets.
European shares rose for the fourth session in five, wiping
out almost all year-to-date losses in an index of top regional
shares, and U.S. stocks edged higher.
Crude oil prices inched up after the Organization of
Petroleum Exporting Countries said it was willing to cut oil
output further if needed to stabilize prices.
"The stimulus package is a supportive structural factor,"
said Harry Tchilinguirian, an oil analyst at BNP Paribas in
London. "It should begin to have an impact on the economy in
the second half of this year and is an underlying element
conditioning sentiment."
A newly energized President Barack Obama began a new drive
to win passage of the stimulus package, flying to Elkhart,
Indiana, to make the case for it to residents of a city where
the unemployment rate has soared to 15.3 percent from 4.7
percent a year ago.
Obama was due to hold his first White House news conference
in the evening.
Focus on the stimulus package led the administration to
postpone Treasury Secretary Timothy Geithner's much-awaited
announcement of a bank rescue plan until Tuesday.
The dollar, which has benefited from a safe-haven bid
recently, fell broadly as investors shrugged off that delay and
focused instead on the positive impact of the rescue plan.
"Currency investors are holding out hope that this bailout
package would be positive overall for the global economy and
financial markets," said Kathy Lien, director of currency
research at GFT Forex in New York.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.76 percent at 84.634.
The euro <EUR=> rose 0.97 percent to $1.3056, and against
the yen, the dollar <JPY=> fell 0.39 percent to 91.62.
Financial shares rose on both sides of the Atlantic as
investors dismissed renewed signs of corporate weakness.
Whirlpool Corp <WHR.N> said earnings would fall further in
2009 after the world's biggest appliance maker posted a 76
percent decline in quarterly profit.
Bank of America <BAC.N> shares rose 11 percent, while the
KBW Bank index <.BKX> climbed 2.96 percent.
Regional banks also gained, with Huntington Bancshares
<HBAN.O> climbing 22 percent. Among insurers, Hartford
Financial <HIG.N> climbed 21 percent.
Before 1 p.m., the Dow Jones industrial average <> rose
12.82 points, or 0.15 percent, to 8,293.41. The Standard &
Poor's 500 Index <.SPX> added 3.17 points, or 0.36 percent, to
871.77. The Nasdaq Composite Index <> climbed 2.51 points,
or 0.16 percent, to 1,594.22.
In Europe a rise in bank stocks was supported by
better-than-expected results at Barclays <BARC.L>, which rose
10.9 percent after posting a 6.1 billion pound ($9 billion)
profit and saying credit market losses were waning.
Other banks on the rise included Deutsche Bank <DBKGn.DE>,
up 6.2 percent, and Commerzbank <CBKG.DE>, up 8.5 percent.
"Fundamentally the market is positioning itself for a
rally," said Darren Winder, head of macro and strategy research
at Cazenove, in London. "We're halfway through the recession,
and we're on very low multiples."
The FTSEurofirst 300 <> index of top European shares
rose 0.5 percent to close at 830.08 points, its highest close
since Jan. 13.
U.S. Treasury debt prices eased as investors continued to
fret over the impact of a record $67 billion in new government
debt to be issued this week, amid lingering worries about how
the economic stimulus package will turn out.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
15/32 in price to yield 3.05 percent, while the 2-year U.S.
Treasury note <US2YT=RR> slipped 3/32 in price to yield 1.05
percent.
Euro zone government bonds also slipped, pushing the
10-year Bund yield to a 2-1/2-month high ahead of a string of
new issuance in longer-dated maturities this week.
The 10-year yield <EU10YT=RR> rose as high as 3.444
percent, its highest since late November, before pulling back
to 3.3407 percent.
The bank-to-bank cost of borrowing dollar funds over three
months also eased as investors awaited the unveiling of the
U.S. rescue plan for the embattled financial industry.
U.S. light sweet crude oil <CLc1> rose 42 cents to $40.59 a
barrel.
Spot gold prices <XAU=> fell $19.60 to $890.95 an ounce.
(Reporting by Ellis Mnyandu, Gertrude Chavez-Dreyfuss, Chris
Reese and Rebekah Kebede in New York; and Brian Gorman, Naomi
Tajitsu and Ian Chua in London; writing by Herbert Lash;
Editing by Dan Grebler)
