* US, Europe stocks rally on US home sales, euro zone data
* US dollar slides as Fed comment, housing data weigh
* Government debt slips as data saps safe-haven appeal
* Oil rises on dollar's weakness, China demand
(Updates with U.S. markets, changes byline, dateline
previously LONDON)
By Herbert Lash
NEW YORK, Nov 23 (Reuters) - Gold hit a fresh record high
on dollar weakness and global stocks surged on Monday after
upbeat economic news in the euro zone and better-than-expected
U.S. home sales data bolstered appetite for riskier assets.
European shares posted their biggest one-day percentage
gain in more than five weeks and an early rally on Wall Street
reversed most of the losses from a three-day sell-off last
week. For details, see: [][]
U.S. gold futures hit record highs above $1,170 an ounce,
gaining more than 2 percent, as the dollar weakened broadly on
expectations U.S. interest rates would stay low for some time.
[]
Oil prices almost topped $80 a barrel, before paring some
gains, as the sagging dollar and signs of buoyant demand from
China, the world's second-largest energy consumer, lifted
commodity prices. []
The dollar slid after a Federal Reserve official affirmed
expectations that U.S. interest rates would stay low for some
time and U.S. housing data dampened the currency's safe-haven
appeal. []
Sales of previously owned U.S. homes jumped in October from
the previous month a record 10.1 percent to their highest level
in more than 2-1/2 years, the National Association of Realtors
said. []
Buyers rushed to take advantage of a popular tax credit for
first-time buyers that had been scheduled to end in November.
"The (housing) data adds to bearish U.S. dollar momentum,
as stronger-than-expected home sales data is bullish for equity
markets," said George Davis, chief technical strategist at RBC
Capital Markets in Toronto. "That decreases risk aversion and
increases broad-based dollar weakness.
In Europe, the euro zone's dominant service sector grew at
its fastest pace in two years in November, suggesting a
recovery will continue in the fourth quarter, albeit at a
slower rate, a key survey showed. []
The FTSEurofirst 300 <> index of top European shares
rose 2.1 percent to close at 1,023.49 points, the biggest
one-day percentage gain since Oct 14.
The index, which has surged more than 58 percent since
hitting a record low in early March, made up more than half the
losses it suffered over the previous four sessions.
At 1 p.m., the Dow Jones industrial average <> was up
124.62 points, or 1.21 percent, at 10,442.78. The Standard &
Poor's 500 Index <.SPX> was up 15.04 points, or 1.38 percent,
at 1,106.42. The Nasdaq Composite Index <> was up 29.87
points, or 1.39 percent, at 2,175.91.
"The rise in home sales was primarily driven by the credit
for first-time home buyers. But still, given the unemployment
rate and given the number of foreclosures, you have to be very
pleased about the numbers. It's stellar," said Tim Speiss,
leader of Personal Wealth Advisors group at Eisner LLP in New
York.
Prices of euro zone and U.S. Treasury debt eased as higher
stocks sapped the safe-haven appeal of government bonds.
Investors also prepared for another huge dose of supply of U.S.
government debt this week. [][]
St. Louis Fed President James Bullard on Sunday said the
U.S. central bank should keep alive its mortgage-related assets
purchase program beyond a planned end date to help stimulate
the economy. [].
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 9/32 in price to yield 3.4 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 1/32 in price to yield 0.74
percent.
Oil gained after China's implied demand in October was more
than 10 percent higher than a year ago, customs data showed. It
was the latest sign consumption is rising in emerging economies
despite the lingering impact of the economic crisis.
"Chinese demand is definitely supporting this market as
demand in the OECD (Organization for Economic Co-operation and
Development) remains relatively weak," said Andrey Kryuchenkov,
analyst at VTB Capital in London.
U.S. light sweet crude oil <CLc1> rose 62 cents to $78.09 a
barrel.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.76 percent at 75.083.
The euro <EUR=> was up 0.80 percent at $1.4979, and against
the yen, the dollar <JPY=> was up 0.22 percent at 89.11.
Spot gold prices <XAU=> rose $17.50 to $1167.00 an ounce.
MSCI's index of Asia-Pacific stocks outside of Japan
<.MSCIAPJ> rose 0.7 percent after Asian markets closed, and
then rose further, up 1.1 percent after midday in New York. The
Nikkei Index <> in Tokyo, however, fell 0.5 percent.
(Reporting by Angela Moon, Gertrude Chavez-Dreyfuss and Chris
Reese in New York; Ian Chua, David Sheppard, Brian Gorman and
Pratima Desai in London; writing by Herbert Lash; Editing by
Andrew Hay)
((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters
Messaging:
herb.lash.reuters.com@reuters.net))
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