* Strong demand in US Treasuries auction boosts sentiment
* Global stocks extend five-day rally on earnings outlook
* U.S. dollar drops to near 12-month low, oil rises
(Updates to U.S. markets' close)
By Walter Brandimarte
NEW YORK, Sept 10 (Reuters) - Positive earnings forecasts
and a robust auction of U.S. Treasury bonds fueled investor
appetite for risk on Thursday, boosting global stocks for a
sixth straight session and sending the dollar near 12-month
lows.
The sale of 30-year bonds eased U.S. fiscal concerns and
propelled Treasuries prices, inverting the usual dynamic that
sends prices of U.S. debt down when investors become more
tolerant to risk.
Further supporting market sentiment was a rise in oil
prices and a better-than-expected reading on U.S. weekly
jobless claims.
A sharp widening of the U.S. trade gap was also seen as a
sign that the world's largest economy is recovering, as imports
rose partly on demand for foreign cars and consumer goods. For
details, see [].
"Commodities and stocks have turned around and things are
getting a little better, so we're seeing the dollar being sold
off," said Steven Butler, director of currency trading at
Scotia Capital in Toronto.
The MSCI's all-country world stock index <.MIWD00000PUS>
rose 0.86 percent, adding to gains of about 4.5 percent during
the past five sessions.
Wall Street gained for the fifth consecutive session, as
brighter earnings outlooks from Texas Instruments Inc <TXN.N>
and Procter & Gamble Co <PG.N> eclipsed disappointing news from
Monsanto Co <MON.N>. [] []
[]
The Dow Jones industrial average <> ended up 80.26
points, or 0.84 percent, at 9,627.48, while the Standard &
Poor's 500 Index <.SPX> climbed 10.77 points, or 1.04 percent,
to 1,044.14. The Nasdaq Composite Index <> finished up
23.63 points, or 1.15 percent, at 2,084.02.
European shares ended slightly higher after a choppy
session, with the FTSEurofirst 300 <> index of top shares
closing up 0.05 percent at 988.33 points.
The rally in U.S. Treasuries caused yields on some of the
bonds to drop to their lowest since July, as investors covered
short positions and unwound bets on rising long-term yields
after the auction, which followed two other sales earlier in
the week.
"This was the best of the three, and the other two were
pretty good," said Lou Brien, market strategist at DRW Trading
in Chicago.
Benchmark 10-year notes <US10YT=RR> rose more than a point
in price for a 3.34 percent yield, down from 3.48 percent on
Wednesday's close.
The 30-year yield <US30YT=RR> was on track for its biggest
one-day decline since late May, while 10-year yield was track
for its steepest single-day drop since July 31.
US DOLLAR FALLS AFTER AUCTION
The strong demand in the Treasuries auction lifted the euro
<EUR=> to as much as $1.4613, a fresh 2009 high. The single
European currency was trading at $1.4580 in the afternoon.
The dollar was also 0.38 percent weaker against a basket of
six major currencies, according to the U.S. dollar index
<.DXY>, which declined to its lowest level in nearly a year.
Also supporting the appetite for higher-yielding assets was
the U.S. weekly jobs data, which showed a decline in both the
the number of U.S. workers filing new claims for jobless
benefits and the number of workers still collecting such
benefits.
U.S. crude oil prices <CLV9> settled up 63 cents, or 0.88
percent, at $71.94 a barrel, after jumping above $72 a barrel
earlier in the session.
Crude prices rose after government data showed crude
inventories fell last week, and the Paris-based International
Energy Agency raised its demand outlook.
(Additional reporting by Richard Leong, Angela Moon and
Gertrude Chavez-Dreyfuss; Editing by Kenneth Barry)
