* Stocks end higher, limited by weak U.S. housing data
* Fed 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) - U.S. stocks ended higher on
Monday supported by strong earnings but gains were limited by a
drop in U.S. housing data showing cracks in the recovery of the
world's largest economy.
Demand for the dollar fell after 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.
Solid earnings from Halliburton and news of Boeing orders
pushed U.S. stocks to positive territory at the end of
business. But a decline in homebuilder sentiment to its lowest
level in more than a year after a popular homebuyer tax credit
expired exacerbated the negative tone from Friday's worst
one-day drop since late June for major U.S. stock indexes.
"There's a lot of indecision about the overall economy's
direction and moves like Friday's only reinforce the negative
view of the second half of the year, as opposed to making
people feel these are buying opportunities," said Michael
James, senior trader at Wedbush Morgan in Los Angeles.
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 <> ended up 56.53
points, or 0.56 percent, at 10,154.43. The Standard & Poor's
500 Index <.SPX> rose 6.37 points, or 0.60 percent, at
1,071.25. The Nasdaq Composite Index <> gained 19.18
points, or 0.88 percent, at 2,198.23.
Halliburton <HAL.N>, 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.
World stocks as measured by MSCI <.MIWD00000PUS> edged down
0.1 percent, while its emerging market counterpart <.MSCIEF>
lost 0.4 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
after confirming it has revived talks with France's GDF Suez
<GSZ.PA>, which rose 0.8 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 0.13 percent at $1.2948, trading
near a recent two-month high against the dollar. It rebounded
from earlier lows hit after Moody's cut Ireland's debt rating
and talks between Hungary and international lenders broke down.
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 0.5
percent to $76.44 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.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 11/32, with the yield at 2.9644 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 1/32, with the yield at
0.5926 percent. The 30-year U.S. Treasury bond <US30YT=RR> was
down 27/32, with the yield at 3.9849 percent.
(Additional reporting by Rodrigo Campos, Wanfeng Zhou and
Richard Leong in New York, and Jan Harvey in London; Editing by
Andrew Hay)
