* Many world stocks indexes set 2009 highs on optimism
* U.S. dollar drops across the board as risk-taking rises
* Oil rises as CIT deal news fuels optimism over recovery
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, July 20 (Reuters) - Crude oil and global stocks
rose on Monday, lifting a number of major indexes to new 2009
highs, on fresh signs that the U.S. economy is pulling out of
recession and as a rescue package for lender CIT sparked
optimism about credit markets.
The dollar weakened broadly, slipping to a six-week low
against the euro, as investors jumped back into riskier assets
amid further news of solid second-quarter U.S. earnings.
Commodities benefited from the improving sentiment. Crude
oil settled just shy of $64 a barrel, copper hit a nine-month
high and gold rose more than 1 percent to settle above $950 an
ounce for the first time in more than a month.
An index gauging the U.S. economy's prospects increased for
a third straight month in June, suggesting the recession was
drawing to a close, the New York-based Conference Board said.
[]
The index of leading economic indicators, which is supposed
to forecast economic trends six to nine months ahead, rose 0.7
percent in June following a revised 1.3 percent gain in May.
"The confirmation of recovery is coming from top down and
bottom up," said Georgina Taylor, equity strategist at Legal &
General Investment Management. "Companies are suggesting that
things are starting to improve. Economic data is stabilizing."
Global stocks, as measured by MSCI's all-country world
index <.MIWD00000PUS>, rose to a 2009 high as did MSCI's
emerging markets index <.MSCIEF> while Asian stocks outside of
Japan <.MIAPJ0000PUS> rose to their highest since world stocks
plunged following Lehman Brothers' collapse last September.
In the United States, the benchmark Standard & Poor's 500
<.SPX> notched its highest close since early November, while
for the tech-rich Nasdaq <> had its highest close for the
year.
Equity markets built on last week's rally, with Britain's
top share index and a regional index of European shares rising
for a sixth straight day. Banks led the surge, while commodity
shares jumped on the stronger crude oil and metals prices.
The FTSE 100 index <> closed up 1.3 percent at
4,443.62 and the FTSEurofirst 300 <> index of top
European shares rose 1.2 percent to 881.19.
Helping lift U.S. and European shares was news that lender
CIT Group Inc <CIT.N> clinched a $3 billion rescue with
bondholders, a person close to the matter said. For more see
[]. CIT rose almost 79 percent to $1.25 a share.
CIT's private-sector bailout was seen as a sign of health
in the credit markets.
"I think it's a healthy sign for the market and a sign of
liquidity and a willingness of private participants to step up
to the plate," said Tom Alexander, head of Alexander Trading in
Savannah, Georgia.
Machinery maker Caterpillar Inc <CAT.N> rose 7.8 percent
and was the top boost to the Dow after Bank of America-Merrill
Lynch upgraded the stock to "buy," saying the second quarter
may mark a bottom for the construction market. []
The Dow Jones industrial average <> closed up 104.21
points, or 1.19 percent, at 8,848.15. The Standard & Poor's 500
Index <.SPX> was up 10.75 points, or 1.14 percent, at 951.13.
The Nasdaq Composite Index <> was up 22.68 points, or 1.20
percent, at 1,909.29.
In commodity markets, U.S. crude <CLc1> settled up 42 cents
to $63.98 a barrel, after rising more than 6 percent last week.
Brent crude <LCOc1> rose $1.06 to settle at $66.44 a
barrel.[]
"I think it's mostly continued follow-through after last
week's rally. Economic optimism fueling stronger equities and
the weaker dollar are supporting commodity markets," said Tom
Bentz, analyst at BNP Paribas Commodity Futures Inc.
The euro rose as high as $1.4249, according to Reuters
data, its strongest level since early June, and the yen, a
typical safe-haven currency, was under broad pressure.
The euro <EUR=> was up 0.96 percent at $1.4231. Against the
yen, the dollar <JPY=> was up 0.05 percent at 94.22.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.63 percent at 78.844.
"It's a risk-preference story. With equities firmer and
breaking some semi-interesting levels, the dollar has come
under pressure as a result," said John McCarthy, director of
foreign exchange at ING Capital Markets in New York.
U.S. Treasury prices rose as trades related to corporate
debt deals dominated the market in a week without much new
government supply. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
12/32 in price to yield 3.61 percent. The 2-year U.S. Treasury
note <US2YT=RR> was up 1/32 to yield 0.97 percent.
The dollar's sharp decline and better U.S. corporate
earnings boosted the appeal of gold as an inflation hedge.
[]
U.S. gold futures for August delivery <GCQ9> settled up
$11.30 at $948.80 an ounce in New York.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 2.9 percent to its highest since Sept. 29.
Japan's markets were shut for a public holiday.
(Reporting by Ellis Mnyandu, Stephen C. Johnson, Mary Angela
Rowe and Matthew Robinson in New York and Ian Chua and Brian
Gorman in London; Writing by Herbert Lash; Editing by Leslie
Adler)
