* US new home sales at 7-month low, temper economy hopes
* European shares close at 15-month high despite data
* Dollar halts 6-day rally, slips against major currencies
By Walter Brandimarte
NEW YORK, Dec 23 (Reuters) - The dollar halted a six-day
rally and global stocks lost steam on Wednesday after an
unexpected fall in U.S. new home sales curbed optimism about an
economic recovery.
Oil prices jumped nearly 3 percent, supporting energy
shares, after inventory data showed a much larger-than-expected
decline in stocks of crude. The dollar slide also boosted
commodity prices in general, sending gold nearly 1 percent
higher.
European shares trimmed gains after the U.S. housing data
but managed to close at a 15-month high, with financials among
the top gainers.
Sales of newly built U.S. single-family homes unexpectedly
dropped 11.3 percent last month to a 355,000 unit annual rate,
frustrating economists who expected an increase to 440,000
units. For details, see []
The data reminded investors that the path to a recovery
will be bumpy, one day after a larger-than-expected jump in
sales of existing U.S. homes fueled a market rally.
"It's clearly a disappointing number," said Nick
Bennenbroek, head of currency strategy at Wells Fargo in New
York.
"You're going to get bumps along the road every so often as
far as recovery is concerned. It might change sentiment
regarding interest rates and the dollar a little bit."
Stock investors, however, appeared ready to take the data
in stride.
The MSCI all-country world stock index <.MIWD00000PUS> was
0.7 percent higher, and the FTSEurofirst 300 <> index of
top European shares rose 0.2 percent to its highest close since
Oct. 3, 2008.
Total trading volume in the European index, which is up 24
percent this year, was just 41 percent of the three-month daily
average.
On Wall Street, shares of technology and natural resource
companies supported gains.
The Dow Jones industrial average <> rose 6.57 points,
or 0.06 percent, at 10,471.50. The Standard & Poor's 500 Index
<.SPX> gained 2.74 points, or 0.25 percent, at 1,120.76. The
Nasdaq Composite Index <> added 15.19 points, or 0.67
percent, at 2,267.86.
DOLLAR HALTS RALLY
The dollar declined for the first time in five sessions
against the euro and halted a six-day rally against a basket of
major currencies after the housing data.
Trading was extremely thin, which may have exaggerated
currency moves. Tokyo markets were closed for a national
holiday and many market players elsewhere have already wound
down for the Christmas holidays and year-end.
The euro <EUR=> was up 0.76 percent at $1.4357. Against the
Japanese yen, the dollar <JPY=> firmed 0.45 percent at 91.43.
The U.S. dollar index <.DXY> was down 0.60 percent.
"Folks are taking some profits on their long dollar
positions ahead of the holiday," said Samarjit Shankar,
managing director of global FX strategy at BNY Mellon in
Boston.
But sterling fell after the Bank of England's December
policy meeting minutes showed that officials felt little had
changed since November. That was seen as leaving the door open
to a further expansion of the central bank's asset buying
program. []
The pound <GBP=D4> fell as low as $1.5924, one tick from
Tuesday's trough, which was the weakest level since
mid-October. It was little changed at $1.5971.
U.S. Treasury prices rose after several days of losses as
the housing data revived some safe-haven bids, but traders
reported very thin volumes.
Benchmark 10-year Treasury notes <US10YT=RR> traded 6/32
higher in price, with the yield at 3.736 percent, down from
3.76 percent late on Tuesday. Two-year notes <US2YT=RR> were
unchanged, with the yield at 0.9133 percent.
U.S. light crude oil <CLc1> rose $2.20 to $76.60 per
barrel, while spot gold prices <XAU=> climbed $10.70, or 0.99
percent, to $1,093.90.
(Additional reporting by Wanfeng Zhou, Chuck Mikolajczak and
Chris Reese; editing by Jeffrey Benkoe)
