* U.S. retailer Lowe's profit helps lift Wall Street
* Dollar, yen fall as risk appetite gains big boost
* Stock rally drains demand for government debt
* Oil rises 5 percent on Nigeria, U.S. refinery fire
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, May 18 (Reuters) - Global stocks rose and bonds
weakened on Monday after a U.S. home improvement retailer's
profit spurred hopes an economic recovery may be closer than
previously thought, boosting risk appetite.
The rally in equities -- European stocks surged more than 2
percent while U.S. shares jumped about 3 percent -- and rising
oil fueled the view that the global downturn may be slowing.
Crude prices rose nearly 5 percent to a six-month high as
violence in top African top crude exporter Nigeria and a fire
at a key U.S. East Coast refinery revived supply concerns.
The equity surge and an initially weaker dollar also helped
spur oil's gains.
The U.S. dollar rose against the yen after comments by a
top official in Japan spurred speculation of intervention by
authorities to curb further strength in the Japanese currency.
Treasury debt prices eased as U.S. and European stocks
rallied, slamming demand for safe-haven government bonds.
"We begin to see evidence that we're moving from a slower
rate of negative change to positive growth, and I think there
is more room for this to run on the upside," said Craig Hester,
chief executive of Hester Capital Management in Austin, Texas.
Lowe's Cos Inc <LOW.N>, the second largest U.S. home
improvement store chain, reported stronger-than-expected
quarterly profit and raised its full-year forecast, boosting
shares in the housing and retail sectors. For details, see
[].
The Dow Jones industrial average <> closed up 235.44
points, or 2.85 percent, at 8,504.08. The Standard & Poor's 500
Index <.SPX> gained 26.83 points, or 3.04 percent, at 909.71.
The Nasdaq Composite Index <> added 52.22 points, or 3.11
percent, at 1,732.36.
Also supporting the gains was a private survey that showed
U.S. homebuilder sentiment jumped to its highest level in eight
months in May, suggesting the three-year housing slump might be
poised to turn around.
"Lowe's numbers come at a time when the market is looking
to rebound. It does show that consumer spending in general has
been a bit stronger than many had anticipated," said Steve
Goldman, market strategist at Weeden & Co in Greenwich,
Connecticut.
Financial stocks climbed on hopes that recession in key
global economies was abating, while energy stocks tracked the
price of crude oil higher.
Positive broker comments on stocks, including Bank of
America Corp <BAC.N>, underpinned the market. The largest U.S.
bank's stock was up 9.9 percent to $11.73.
The FTSEurofirst 300 <> index of top European shares
closed 2.4 percent higher at 859.88 points.
Nigerian militants said they blew up two oil and gas
pipelines in the Niger Delta and would blockade waterways in
the region in an effort to disrupt energy exports from the
member of the Organization of Petroleum Exporting Countries.
[]
U.S. crude <CLc1> for June rose $2.69 to $59.03 a barrel --
the highest settlement since Nov. 11. London Brent <LCOc1> for
July rose $2.49 to $58.47.
The yen retreated from a two-month high near 94.50 to the
dollar and slid versus other currencies. Japan's vice finance
minister, Kazuyuki Sugimoto, said he was watching foreign
exchange market moves carefully, and he hoped they would not
have a negative effect on the economy. See [].
Against the yen, the dollar <JPY=> rose 1.25 percent at
96.38. The euro <EUR=> added 0.42 percent at $1.3548.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.44 percent at 82.586.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
25/32 in price to yield at 3.23 percent. The 2-year U.S.
Treasury note <US2YT=RR> fell 3/32 in price to yield 0.91
percent.
New York gold futures ended 1 percent lower as a Wall
Street rally lessened safe-haven demand. Gold for June delivery
<GCM9> settled down $9.60 at $921.70 an ounce in New York.
Copper closed 2.7 percent higher, sparked by the Wall
Street rally and in anticipation of improved housing data from
the United States. Copper for July delivery <HGN9> rose 5.45
cents to settle at $2.0720 a lb.
Most Asian stock markets fell overnight on concerns about
corporate profits and uncertainty over the global economy, but
Indian shares surged after the ruling coalition's sweeping
election victory on Sunday.
India's benchmark 30-share BSE index <> surged more
than 17 percent before trading was halted, pulling the MSCI
index of Asian stocks outside Japan <.MIAPJ0000PUS> to a 1.2
percent gain, although most individual markets fell.
Japan's Nikkei average <> fell 2.5 percent.
(To read Reuters Global Investing Blog, double-click on
http://blogs.reuters.com/globalinvesting. For the MacroScope
Blog click on http://blogs.reuters.com/macroscope. For Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Reporting by Ellis Mnyandu, Richard Valdmanis, Wanfeng Zho
and Ellen Freilich in New York; Atul Prakash, Ian Chua, Rebekah
Curtis and Jan Harvey in London; writing by Herbert Lash;
Editing by Kenneth Barry)
