* U.S., European stocks surge after Citigroup is rescued
* Govt debt prices fall but yields close to historic lows
* Oil rises above $53 a barrel as Venezuela urges OPEC cut
* Dollar falls vs euro, sterling as risk aversion cools
(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Nov 24 (Reuters) - U.S. and European stocks
surged in a broad relief rally on Monday and government debt
prices fell after Washington rescued Citigroup, reassuring
investors who feared its collapse could push financial system
into the abyss.
Oil rose more than $3 a barrel as investors anticipate a
further cut in crude supplies by members of the Organization of
Petroleum Exporting Countries.
The euro and sterling extended gains against the U.S.
dollar as risk aversion eased after the U.S. government agreed
to inject $20 billion of fresh capital into Citigroup <C.N>.
The $300 billion-plus rescue package for Citigroup spurred
broad equity rallies on both sides of the Atlantic, outweighing
more gloomy economic news.
German corporate sentiment plunged to its lowest level in
nearly 16 years in November, an Ifo survey showed, while the
pace of existing U.S. homes sales fell 3.1 percent in October
and the median home price dropped to its lowest in more than
four years, a National Association of Realtors report showed.
The Citigroup news lifted the battered financial sector,
and an index of home builders <.DJUSHB> jumped 11.6 percent,
its biggest single-day gain since the collapse of Bear Stearns
in March.
"The news on Citigroup is about confidence," said Cummins
Catherwood, managing director at financial services firm
Boenning & Scattergood in West Conshohocken, Pennsylvania.
"There's not a master stroke that's going to make everybody
come out and be happy again. Confidence is a mosaic that has to
be put up piece by piece and the Citi plan is just one piece."
Citigroup Inc shares jumped more than 50 percent to about
$5.75 after plummeting more than 60 percent to a low of $3.05
on Friday on fears the No. 2 U.S. bank by assets might not
survive.
Citigroup shares were among the Dow's top boosts, along
with JPMorgan Chase and Co <JPM.N>. Rising energy prices
underpinned in oil stocks, leading Exxon Mobil Corp <XOM.N>, up
3.1 percent at $78.19.
At 1 p.m., the Dow Jones industrial average <> was up
262.76 points, or 3.27 percent, at 8,309.18. The Standard &
Poor's 500 Index <.SPX> was up 34.68 points, or 4.33 percent,
at 834.71. The Nasdaq Composite Index <> was up 53.79
points, or 3.89 percent, at 1,438.14.
European shares raced higher on the Citigroup bailout, with
the FTSEurofirst 300 <> index of top European shares
rising 8.9 percent to close at 828.63.
Energy stocks were the top contributor's to the index's
rise, with BP <BP.L> up 11 percent, Total <TOTF.PA> up 12.5
percent and Royal Dutch Shell <RDSa.L> up 14 percent.
Miners tracked higher metals prices. BHP Billiton <BLT.L>
surged 22.9 percent, Anglo American <AAL.L> jumped 22.8 percent
and Rio Tinto <RIO.L> climbed 18.1 percent.
However, yields of U.S. and European short-term government
debt remained not far off record lows and gold prices shot
higher as unease persisted about the depth of the credit crisis
and global economic downturn.
"Another weekend, another bailout which seems to have
contributed to a knee-jerk bounce in equities and unwinding of
some of the safe-haven bid in Treasuries," said Kim Rupert,
managing director, global fixed-income analysis with Action
Economics LLC in San Francisco.
U.S. stocks pared some gains after President-elect Barack
Obama, who named the team of officials who will steer his
administration's economic policy, failed to offer any new
details about his plans to combat the slumping U.S. economy.
"People wanted to hear how much he's going to put into the
stimulus package and he wouldn't put a number on it," said Dave
Rovelli, managing director U.S. equity trading at Canaccord
Adams in New York.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
23/32 in price to yield 3.32 percent. The 2-year U.S. Treasury
note <US2YT=RR> fell 4/32 in price yield 1.20 percent.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 1.75 percent at 85.927.
Against the yen, the dollar <JPY=> was up 0.61 percent at
96.44.
The euro <EUR=> rose 2.46 percent at $1.2887.
U.S. light sweet crude oil <CLc1> rose $4.52 to $54.45 a
barrel.
Spot gold prices <XAU=> rose $25.40 to $823.90 an ounce,
which analysts attributed to demand for safe assets due to
fears that other banks may need to be rescued.
Overnight the MSCI index of Asia-Pacific stocks excluding
Japan <.MIAPJ0000PUS> briefly posted a small gain after the
Citigroup news, but was off 0.7 percent when Asian markets
closed. Japanese markets were closed for a public holiday.
(Reporting by Ellis Mnyandu, John Parry, Vivianne Rodrigues
and Frank Tang in New York, and Kirsten Donovan, Atul Prakash
and Alex Lawler in London; Writing by Herbert Lash; Editing by
Tom Hals)
