* U.S. stocks rebound, close flat on weak housing data
* Government debt prices rise on poor U.S. housing data
* Euro rebound stalls on Spain debt worries, U.S. data
* Crude oil prices rebound on mixed inventory data
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, June 16 (Reuters) - U.S. stocks closed flat on
Wednesday, battered by weak housing data that underscored an
uneven recovery, while the euro slipped against the dollar on
renewed concerns about Spain's credit and banking system.
U.S. housing starts in May fell to a five-month low,
raising risk aversion among investors, even though
stronger-than-expected U.S. industrial production helped keep
stock and currency losses in check.
U.S. government debt prices rose on the housing data, which
added to fears the U.S. economic recovery remains tentative.
Industrial metal prices mostly fell, with U.S. copper futures
snapping a six-day rally.
U.S. stocks initially traded down, then rebounded on news
that BP had reached a tentative agreement to open an escrow
fund demanded by U.S. President Barack Obama to provide for
claims from its Gulf of Mexico oil spill.
BP's New York-traded shares rose 1.5 percent, although they
have shed almost half their market value since the Gulf of
Mexico oil spill occurred in April.
The Dow Jones industrial average <> added 4.69 points,
or 0.05 percent, to 10,409.46. The Standard & Poor's 500 Index
<.SPX> edged down just 0.62 of a point, or 0.06 percent, to
1,114.61. And the Nasdaq Composite Index <> inched up just
0.05 of a point, or 0.00 percent, to 2,305.93.
"The industrial production number is saying that demand is
still there, production is still there," said Marc Pado, U.S.
market strategist at Cantor Fitzgerald & Co. in San Francisco.
"That's telling me there is going to be a nice little increase
in profit margins, even on flat revenue."
The MSCI world equity index <.MIWD00000PUS> rose 0.3
percent after hitting its highest level since mid-May earlier
in the session. The MSCI emerging markets index <.MSCIEF> rose
0.6 percent.
Gains in U.S. Treasuries were muted as U.S. stocks traded
close to flat for most of the day, and as tight correlation
between debt and stock prices continued to dominate markets.
Benchmark 10-year Treasury notes <US10YT=RR> closed out the
day 10/32 higher in price to yield 3.27 percent.
The S&P 500 stayed above its 200-day moving average a day
after exceeding that level for the first time in a month.
Investors took that as a positive signal because they view the
200-day average as an important momentum indicator.
Though still up 1.6 percent this week, the euro failed for
a second day to break convincingly through the $1.2350 area,
retreating after a Spanish newspaper reported that the European
Union, International Monetary Fund and U.S. Treasury were
drawing up an emergency credit line for Spain.
The European Commission denied the report, but the premium
investors demand to hold 10-year Spanish bonds over German
bunds hit the highest level in the euro's 11-year history.
[]
"Worries about Spain's situation wiped out whatever risk
appetite was left in the market," said Matthew Strauss, senior
analyst at RBC Capital Markets in Toronto. "The euro had a good
run from below $1.19 last week to around $1.2350, but failure
to go further is reflective of the underlying market anxiety."
The euro was last changing hands at $1.2305 <EUR=>, down
0.2 percent, after earlier hitting $1.2354, a two-week high.
Against the yen, the euro was off 0.2 percent at 112.46 yen
<EURJPY=> and the dollar was flat at 91.38 yen <JPY=>.
Gold moved modestly lower as some short-term investors took
profits off an early rise to a one-week high above $1,237 an
ounce. Declines in the euro and in U.S. stocks hit gold in late
trade.
U.S. gold futures for August delivery <GCQ0> ended $3.90
lower at $1,230.50 an ounce.
U.S. crude oil rose for a third straight day, ending a
choppy session at a six-week high amid the mixed economic data
and a government inventory report that showed crude oil stocks
rose and gasoline stocks fell last week.
"The ability of the energy complex to advance significantly
today without much assistance from the euro or equities
suggests an energy momentum play at work," Jim Ritterbusch,
president at Ritterbusch & Associates, said in a note.
U.S. crude for July delivery rose 73 cents, or 0.95
percent, to settle at $77.67 a barrel, the highest close since
May 5.
In London, ICE Brent crude for August delivery rose $1.04
to settle at $78.14 a barrel.
(Reporting by Rodrigo Campos, Wanfeng Zhou, Emily Flitter in
New York; Joanne Frearson, Emma Farge, Jan Harvey and Ian Chua
in London; Writing by Herbert Lash; Editing by Leslie Adler)
