* Stocks move sideways after weak U.S. housing data
* Fed's Chairman comments on economy expected
* Euro gains despite Ireland's credit rating downgrade
* Gold falls on increased risk appetite
By Manuela Badawy
NEW YORK, July 19 (Reuters) - The euro rose while U.S.
stocks tipped between positive and negative territory on Monday
as worries about the pace of a U.S. economic recovery kept
markets cautious.
After Friday's worst one-day drop since late June, the S&P
and other U.S. stock indexes opened higher as earnings season
kicked into high gear. But weak homebuilding data reminded
investors of the delicate state of the economic recovery.
Gold fell to a two-month low amid a sharper appetite for
riskier assets, while oil prices trimmed earlier gains.
But markets lost ground after data showed homebuilder
sentiment fell more than expected in July to its lowest level
in more than a year after a popular homebuyer tax credit
expired. That erased gains from Halliburton Co <HAL.N> and
Boeing Co <BA.N>.
"If economic data continues to underperform, there is
potential for us to slip into a double-dip recession and that
is the fear," Joshua Raymond, market strategist at City Index
in London said, adding that low volumes could be exaggerating
the market's moves.
Traders were reluctant to take fresh positions ahead of Fed
Chairman Ben Bernanke's comments on the economy on Wednesday.
He could temper fears of a double-dip recession when he
testifies at his semi-annual appearance before Congress.
"Seeing these numbers go down fits the notion that housing
will be a drag into the third quarter," said Jonathan Basile,
economist at Credit Suisse in New York. "The downside surprise
today means a downside surprise in housing starts tomorrow."
U.S. housing starts <USHST=ECI> data is to be released on
Tuesday at 8:30 a.m. EDT. (1230 GMT)
The Dow Jones industrial average <> was up 8.93 points,
or 0.09 percent, at 10,106.83. The Standard & Poor's 500 Index
<.SPX> was up 0.20 points, or 0.02 percent, at 1,065.08. The
Nasdaq Composite Index <> was up 1.57 points, or 0.07
percent, at 2,180.62.
Halliburton, which worked on the leaking well in the Gulf
of Mexico, reported profit surged 83 percent on strong U.S.
onshore drilling []. Boeing Co <BA.N> was one of
the top boosts to the Dow, rising 1.3 percent to $62.65, after
a top executive said the planemaker will announce a significant
number of new orders in the coming days. []
Markets awaited earning results from IBM <IBM.N> and Texas
Instruments <TXN.N> after the bell.
World stocks as measured by MSCI <.MIWD00000PUS> edged down
0.3 percent, while its emerging market counterpart <.MSCIEF>
lost 0.5 percent.
In Europe, the FTSEurofirst 300 index <> closed
negative after the U.S. homebuilder sentiment, falling 0.6
percent.
Optimism over a pickup in M&A activity helped provide some
support to the index. International Power surged 10.6 percent
percent after confirming it has revived talks with France's GDF
Suez <GSZ.PA>, which rose 0.8 percent. []
Asian stocks excluding Japan <.MIAPJ0000PUS> fell 1
percent.
Data at the end of last week showed consumer sentiment in
the world's biggest economy dropped to a near one-year low in
July and consumer prices fell for a third month in June,
highlighting a sluggish U.S. recovery. []
EURO CAPPED
The euro <EUR=> was up 0.18 percent at $1.2953, against the
dollar and rebounding from lows hit after Moody's downgraded
Ireland's sovereign ratings. []
The dollar has been pressured in recent weeks as
disappointing U.S. economic news quashed expectations of an
interest-rate hike by the Federal Reserve, diminishing the
currency's yield appeal.
"The euro is now simply trading on U.S. economic weakness,"
said Joseph Trevisani, chief market analyst at FX Solutions in
Saddle River, New Jersey.
Semi-official euro demand was helping push the rate back
above $1.2900. A large buy order from the Middle East lifted
euro/dollar to a session high of $1.2991.
In energy and commodity prices, crude oil <CLc1> rose 0.3
percent to $76.24 per barrel, while spot gold <XAU=> fell more
than 1 percent to a two-month low at $1,177.15 an ounce.
"Liquidation of long positions is weighing," said BNP
Paribas analyst Anne-Laure Tremblay. "The liquidation is taking
gold closer to closely watched technical levels, and this has
potentially initiated further selling."
U.S. Treasury debt prices slipped, but volume was scant.
Analysts said market action would be driven mostly by stocks.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 4/32, with the yield at 2.9411 percent, from a drop to
2.93 percent on Friday, their worst one-day drop since June.
The 2-year U.S. Treasury note <US2YT=RR> was unchanged with
the yield at 0.5886 percent. The 30-year U.S. Treasury bond
<US30YT=RR> was down 13/32, with the yield at 3.9618 percent.
(Additional reporting by Wanfeng Zhou and Richard Leong in
New York, Jan Harvey and Harpreet Bhal in London)
