* U.S., European stocks rise on data, Bernanke
* Oil pulls back from 10-month high on profit-taking
* Dollar edges lower on upbeat U.S. data, Bernanke news
* Bonds fall on higher stocks, encouraging data
(Updates with U.S. markets activity, changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Aug 25 (Reuters) - World stocks surged to
10-month highs on Tuesday after upbeat U.S. economic data and
Ben Bernanke's renomination as Federal Reserve chief spurred
optimism, but increased risk-taking weakened the U.S. dollar.
U.S. Treasury debt prices fell as the renewed gains on Wall
Street and data on U.S. home prices and consumer confidence
reduced a safety bid for bonds. <For related news click
[]>.
Crude oil, which has been tracking the months-long rise in
equities, fell after dealers took profits from a rally earlier
in the day to 10-month highs. [].
MSCI's all-country world index <.MIWD00000PUS>, among other
major U.S. and European indexes, set new 10-month highs. The
MSCI index gained 0.2 percent.
Investors cheered a report that showed consumer confidence
increased more than expected in August, while the
S&P/Case-Shiller home price index rose in June rose for a
second straight month.
Rebounding home prices, as well as stronger consumer
spending, are seen as critical for the U.S. economy to bounce
back from its worst recession since the Great Depression.
"These numbers are definitely reassuring, though I'm more
focused on the housing data. Still, the consumer confidence is
like gravy today," said Melvin Harris, market strategist, at
Advanced Currency Markets in New York.
"We're not in full-blown recovery mode yet but we are
seeing more normalized markets. Consumer numbers are important
numbers -- they are an indicator of what people are willing to
spend and that matters for GDP growth."
Financial shares were among the top gainers, with the S&P
financial index <.GSPF> rising 1.6 percent.
About 1 p.m. (1700 GMT), the Dow Jones industrial average
<> was up 88.27 points, or 0.93 percent, at 9,597.55. The
Standard & Poor's 500 Index <.SPX> was up 9.69 points, or 0.94
percent, at 1,035.26. The Nasdaq Composite Index <> was up
18.30 points, or 0.91 percent, at 2,036.28.
In Europe, regional shares hit their highest closing since
October on the U.S. data, with energy companies and banks
rebounding from earlier losses.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.4 percent at 978.76.
"Overall, stocks have had a nice rally. They're sporting
new recovery highs and are trading 53 percent above their
lows," said Steve Goldman, market strategist at Weeden & Co in
Greenwich, Connecticut.
"In another time, this data maybe would've helped, but now
it's not helping so much since we've had such gains over the
past four or five weeks."
After shooting up in early trade following the U.S. data,
prices eased.
U.S. crude oil <CLc1> slipped 53 cents to $73.84 a barrel,
down from a peak of $75. Brent crude <LCOc1> dropped 83 cents
to $73.43 a barrel.
Copper fell as investors retreated on mounting worries that
recent price gains may have been overdone and on concern about
slowing Chinese demand. []
The euro <EUR=> rose 0.2 percent for the day to $1.4326.
The ICE Futures' dollar index <.DXY>, a measure of the dollar's
value against six major currencies, slipped 0.2 percent to
78.124.
Nagging doubts over the strength of a global recovery,
together with mortgage-related hedging, mitigated early losses
in U.S. bonds, analysts said.
The benchmark 10-year U.S. Treasury note was down 11/32 in
price to yield 3.52 percent.
Euro zone government bonds held their ground in the face of
renewed strength in global stocks as bond investors largely
shrugged of the U.S. economic data. []
A string of dovish comments from European Central Bank
officials has helped underpin the bond market despite gains in
equities, traders said.
Steve Barrow, analyst at Standard Bank, said chances are
the European Central Bank will cut interest rates again.
"The point for me, and as ECB member after ECB member have
said, their focus is inflation and I feel that inflation is
going to stay very low indeed and the ECB is going to respond
to that," Barrow said.
Gold extended gains as the dollar weakened. U.S. gold
futures for December delivery <GCZ9> rose $5.80 to $949.40 in
New York/
Asian shares and commodities slipped in a partial reversal
of the previous day's solid gains. MSCI's index of Asia-Pacific
shares outside Japan <.MIAPJ0000PUS> dropped 1 percent, while
Japan's Nikkei average <> shed 0.8 percent.
(Reporting by Rodrigo Campos, Gertrude Chavez-Dreyfuss,
Richard Leong in New York; Ikuko Kurahone, Ian Chua and Joanne
Frearson in London; writing by Herbert Lash)
