* Dollar sinks to 6-month low vs euro on Dudley comments
* Oil jumps to $81 on weak dollar, China data support
* Bond prices fall on improved U.S. income, spending data
* Gold hits peak at $1,317.80/oz as dollar slips
(Updates with opening of U.S. markets, changes byline,
dateline; previous LONDON)
By Herbert Lash
NEW YORK, Oct 1 (Reuters) - The U.S. dollar hit a six-month
low versus the euro and global stocks trimmed gains on Friday
after a Federal Reserve official said more Fed easing may be
needed and U.S. manufacturing growth slowed last month.
Crude oil jumped on strong Chinese manufacturing data and
gold prices hit a record high for a sixth successive session on
expectations of further U.S. monetary easing after comments by
William Dudley, president of the New York Fed. For details, see
[] []
The dollar, oil and U.S. stocks trimmed gains after a
report from the Institute for Supply Management showed growth
in the U.S. manufacturing sector slowed in September.
Treasury losses deepened on the ISM data, which showed
factory activity holding up better than the rest of the economy
even as indications suggest new orders are losing steam.
Dudley said that current conditions of high unemployment
and low inflation are "unacceptable," suggesting another round
of quantitative easing may be in the works. []
"The Fed has only provided statements that the market
should expect QE2. The only question is how much. That is the
catalyst for the advancement for stocks and bonds," said Todd
Schoenberger, managing director at Landcolt Trading Inc in
Austin, Texas.
MSCI's all-country world equity index <.MIWD00000PUS> was
up 0.3 percent, but the pan-European FTSEurofirst 300 <>
was down 0.4 percent and U.S. indexes hovered near break-even.
The Dow Jones industrial average <> was up 27.02
points, or 0.25 percent, at 10,815.07. The Standard & Poor's
500 Index <.SPX> was up 1.91 points, or 0.17 percent, at
1,143.11. The Nasdaq Composite Index <> was down 2.13
points, or 0.09 percent, at 2,366.49.
Oil rose on Friday to above $81 a barrel to a seven-week
high, boosted by the weak dollar and Chinese factory activity.
[]
U.S. crude for November <CLc1> having hit $81.40 a barrel,
its highest level since around mid-August, before trimming some
gains. U.S. light sweet crude was up 93 cents at $80.90.
The strong manufacturing data from China, the world's
largest consumer of industrial metals, boosted copper prices to
their highest in more than two years. []
Copper touched $8,178 a tonne on the London Metal Exchange,
a gain of about 35 percent since early June and its highest
since July 2008.
The dollar was down against major currencies, with the U.S.
Dollar Index <.DXY> down 0.59 percent at 78.255.
The euro <EUR=> was up 0.84 percent at $1.3744, and against
the Japanese yen, the dollar <JPY=> was down 0.25 percent at
83.24.
Treasury prices fell on stronger-than-expected data in
spite of Dudley's remarks leaving open the possibility for more
Federal Reserve support for the economy. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 3/32 in price to yield 2.52 percent.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> was up 0.7 percent on the Chinese manufacturing
data. Japan's Nikkei <> average closed up 0.37 percent.
(Reporting by Edward Krudy, Gertrude Chavez-Dreyfuss and Emily
Flitter in New York; Marie-Louise Gumuchian and Jan Harvey in
London; Writing by Herbert Lash; Editing by Kenneth Barry)
