* Global stocks jump as U.S. data underpins recovery hopes
* Oil edges over $72 a barrel as U.S. stockpiles decline
* U.S. dollar slips to 1-year low against major currencies
* Strong economic data kicks government bond prices lower
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Sept 16 (Reuters) - The U.S. dollar slumped to
near one-year lows on Wednesday, helping lift global stocks and
commodities, as fresh U.S. data spurred optimism about an
economic recovery and eroded demand for safe-haven assets.
Most prices for U.S. and euro zone government debt fell
after a second day of surprisingly strong U.S. economic data
fueled expectations of a robust recovery from the worst global
downturn since World War Two. For details see [].
Oil rose to over $72 a barrel after data showed U.S. crude
stockpiles fell more than expected last week, and U.S. gold
futures soared to highs dating back to July 2008, driven by
fears of potential inflation. [] []
The weak dollar and economic optimism helped the
Reuters-Jefferies CRB index <.CRB> of 19 mostly U.S.-traded
commodities to rise almost 2 percent and hit a one-month high.
Wall Street rallied for a third day as increased industrial
output in August and a pickup in mergers and acquisitions
reinforced hopes the economy was well on the way to recovery.
"The dollar continues to get pounded. That translates into
higher commodity stocks, and industrials continue to be a
beneficiary" of dollar weakness, said Michael James, senior
trader at investment bank Wedbush Morgan in Los Angeles.
Shares of industrial companies that benefit from a weaker
dollar gained, including General Electric Co <GE.N>, up 6.3
percent. The dollar's decline also boosted commodities prices,
which in turn lifted shares of natural resource companies.
Shares of natural resource companies also rose on the
dollar's decline.
The euro <EUR=> rose 0.5 percent to $1.4731, after earlier
climbing to $1.4736, the highest since late September 2008.
The ICE Futures U.S. dollar index <.DXY>, which tracks its
performance against a basket of six other major currencies,
fell as low as 76.151, its weakest in nearly a year.
Traders have sold the dollar heavily this month as recovery
hopes diminished safe-haven demand. Speculation that the dollar
was replacing the yen as a funding currency and concerns about
the growing U.S. fiscal deficit fueled dollar selling.
"There's still this persistent link between Wall Street and
risk," said Ronald Simpson, a currency analyst at Action
Economics in Tampa, Florida. "With stocks going up, it
continues to be very difficult for the dollar to rally."
U.S. stocks rose more than 1 percent, as did equity markets
in Europe and Asia, where stocks rose on Tuesday's U.S. retail
sales report and remarks by Federal Reserve Chairman Ben
Bernanke that the U.S. recession was probably over.
The Dow Jones industrial average <> closed up 108.30
points, or 1.12 percent, at 9,791.71. The Standard & Poor's 500
Index <.SPX> added 16.13 points, or 1.53 percent, at 1,068.76.
The Nasdaq Composite Index <> gained 30.51 points, or 1.45
percent, at 2,133.15.
U.S. industrial production rose for a second consecutive
month in August, while higher gasoline costs pushed up U.S.
consumer prices last month. Economists said the risk of
inflation in the United States remained low. []
"The data still suggests strength in the U.S. economy in
the second half," said David Gilmore, a partner at Foreign
Exchange Analytics in Essex, Connecticut.
"If we see strong numbers between now and next March, it's
going to be pretty hard to get in the way of equities going
higher and risk assets going higher," Gilmore said.
A Reuters poll of economists in the United States and
Europe released on Wednesday forecast strong U.S. economic
growth in the current quarter after four quarters of decline.
The poll put growth at a 3 percent annual rate, significantly
higher than the 2.4 percent growth rate in the August poll.
NYMEX crude <CLc1> rose $1.58 to settle at $72.51 a barrel,
adding to Tuesday's gain of $2.07, while ICE Brent <LCOc1> rose
$1.81 to $71.67.
Most U.S. Treasuries fell. Benchmark 10-year notes
<US10YT=RR> slipped 3/32 in price to yield 3.47 percent.
The December gold contract <GCZ9> finished $13.90 higher in
New York at $1,020.20 an ounce.
In Europe, the FTSEurofirst 300 index <>, led by
heavyweight banks and commodity stocks, closed up 1.39 percent
at 1,006.15, rising for eight of the past nine sessions.
Most major Asian equity markets gained 1 percent or more
after Tuesday's U.S. retail sales report. The MSCI index of
Asia-Pacific shares <.MIAPJ0000PUS> excluding Japan rose 2.6
percent to its highest this year.
Japan's benchmark Nikkei stock index <> rose 0.5
percent.
(Reporting by Edward Krudy, Nick Olivari and Burton Frierson
in New York and Chris Baldwin, Jessica Mortimer and Dominic Lau
in London; Writing by Herbert Lash; Editing by James
Dalgleish)
