* U.S. housing, durable goods data fuels rally
* Ifo, UK retail data weigh on Europe
* Dollar lower versus euro in volatile trade
By Al Yoon
NEW YORK, March 25 (Reuters) - World stocks rebounded from
earlier losses on Wednesday, led by an advance in Wall Street,
as upbeat U.S. housing and durable goods data fueled hopes the
economic downturn in the United States may be moderating.
U.S. government debt fell on concerns over a surge in
supply to finance the ballooning U.S. deficit, and the dollar
fell against major currencies after Treasury Secretary Timothy
Geithner said he was open to expanding the use of the
International Monetary Fund's special drawing rights.
A disappointing Treasury note auction reversed an early
rally in U.S. stocks, but investors ultimately shrugged off
that disappointment and focused on the strong economic data.
The government reported that new home sales in the U.S.
unexpectedly rose at their fastest pace in 10 months in
February, while U.S. orders for long-lasting manufactured goods
also unexpectedly rebounded in the same month. For details see
[].
The U.S. economic news helped offset earlier pessimism in
Europe sparked by a weak German corporate sentiment survey and
poor UK retail data.
"It's about time we had some good news," said Mike Lenhoff,
chief strategist and head of research at Brewin Dolphin
Securities in London. "Does this mean it's all coming together?
Far from it, but it provides a respite from what has been a
monotonous stream of poor newsflow."
Stock indexes closed higher on Wall Street after a
topsy-turvy session, and neared their highest levels since
mid-February. Homebuilders and industrial conglomerates fueled
gains, as did late gains in bank shares.
The Dow Jones Industrials Average <> and S&P 500 Index
<.SPX> rose 1.17 percent and 0.96 percent to 7,749.81 and
813.88, respectively. The Nasdaq Composite <> edged higher
by 0.82 percent to 1,528.95.
In Europe, the FTSEurofirst 300 <> index of top
European shares climbed 0.4 percent to 743.94 points. The index
earlier sank as low as 732.7 after the Munich-based Ifo
economic research institute said its business climate index,
based on a monthly poll of around 7,000 firms, fell to 82.1
from 82.6 in February.
Meanwhile in the UK, the Confederation of British
Industry's distributive trades survey balance fell to -44 in
March from -25 in February, triggering broad declines in
sterling.
Oil prices fell after the Energy Information Administration
reported U.S. weekly crude stocks rose last week to their
highest level since 1993. []. U.S. light crude for May
delivery <CLc1> settled at $52.77 a barrel, down $1.21.
GEITHNER'S COMMENTS
The U.S. dollar slid against the euro in volatile trading
after U.S. Treasury Secretary Timothy Geithner expressed
openness to expanded use of an IMF currency basket even as he
said the greenback would remain the world's reserve currency
for a long time. []
Investors initially interpreted his remarks as negative for
the dollar, sending it to a session low against the euro.
The euro was last 1 percent higher at $1.3596 <EUR=>.
Against the yen, the dollar down 0.3 percent at 97.42 yen
<JPY=>.
China's central bank governor said earlier this month the
world should consider the special drawing right (SDR), a basket
of dollars, euros, sterling and yen, as a super-sovereign
reserve currency.
Geithner, responding to a question at a Council of Foreign
Relations event in New York, said he had not read the Chinese
proposal but added, "As I understand it, it's a proposal
designed to increase the use of the IMF's Special Drawing
Rights. I am actually quite open to that suggestion."
In fixed income markets, government bonds in the United
States and in Europe were hit by supply worries.
U.S. Treasury debt prices fell after tepid demand at an
auction of $34 billion in five-year notes. Concerns over
burgeoning supply of sovereign debt also intensified after poor
investor showing at an auction of 30-year UK government bonds
worth 1.75 billion pounds, analysts said.
Ten-year Treasury notes <US10YT=RR> fell 23/32 for a yield
of 2.79 percent, up from 2.71 percent late on Tuesday.
(Additional reporting by Natsuko Waki in London, Vivianne
Rodrigues, Leah Schnurr, Nick Olivari and Richard Leong in New
York; Editing by Leslie Adler)
