* Stocks gain on U.S. durables data, oil lifts energy shrs
* Oil prices rise for third day as Gustav heads for Gulf
* Dollar slips as hawkish talk lifts euro from 6-month low
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Aug 27 (Reuters) - U.S. and European stocks rose
on Wednesday as a surprise rise in U.S. durable goods data
eased concerns about the weak U.S. economy and helped lift the
battered financial sector, but the dollar slipped.
Oil rose on forecasts that Tropical Storm Gustav will
intensify into a hurricane and lead to a shutdown of U.S. oil
and natural gas platforms as it churns toward the Gulf of
Mexico.
Data showing an unexpected fall in U.S. crude stocks also
boosted oil demand, which lifted energy shares and made them
the biggest contributors to gains in U.S. and European stocks.
The euro strengthened against the dollar and euro zone
government bond prices fell after several European Central Bank
officials played down the chance of an interest rate cut soon.
Investors bet the dollar's recent jump to 2008 highs
against major trading currencies went too far, too fast given
the hawkish rhetoric from ECB officials.
Sterling slid to a new two-year low against the dollar in
thin trading, pressured by concerns about a slowing British
economy that could force the Bank of England to cut rates.
The U.S. durable goods report for July, which showed orders
up in many sectors, dealt U.S. government debt a blow but
lifted European stocks out of negative territory and provided
an initial boost to U.S. stocks.
Orders for durable goods, items meant to last three years
or more, were up 1.3 percent after an upwardly revised 1.3
percent gain in June, the Commerce Department said. Analysts
were expecting durable goods orders to remain unchanged.
Boeing Co. <BA.N> added 1.65 percent after the government
said a 28 percent rise in orders for civilian aircraft helped
drive up demand for expensive manufactured items in July.
"The resilience of capital goods spending in face of tight
credit conditions, a poor growth outlook and declining business
confidence continues to surprise," said Zach Pandl, an
economist at Lehman Brothers in New York.
The resurgence in oil prices boosted energy stocks, with
Exxon Mobil <XOM.N> gaining 0.65 percent to $80.47, while
financial stocks also rallied with the S&P Financial Index
<.GSPF> up 1.69 percent.
The Dow Jones industrial average <> closed up 89.64
points, or 0.79 percent, at 11,502.51. The Standard & Poor's
500 Index <.SPX> rose 10.15 points, or 0.80 percent, at
1,281.66. The Nasdaq Composite Index <> was up 20.49
points, or 0.87 percent, at 2,382.46.
European shares rose on an oil-powered rally in British
stocks and the robust U.S. durable goods data.
The FTSEurofirst 300 <> index of top European shares
closed 0.2 percent higher at 1,173.64 points, led by energy
stocks, which climbed 1.6 percent on the sector index <.SXEP>.
Royal Dutch Shell <RDSa.L> shares climbed 2.3 percent and
BP <BP.L> was up 1.8 percent.
"The oil sector in particular, coupled with the steady
recovery we have seen in the crude price over the past week,
seems to be attracting interest from investors again," said
David Jones, chief market strategist at IG Index in London.
Aside from fears over Gustav, oil prices were boosted by
data from the U.S. Energy Information Administration that
showed crude oil stocks fell 100,000 barrels last week, far
less than predictions of a rise of 1 million barrels.
Storm tracks showed Gustav churning toward the Gulf of
Mexico, and forecaster Planalytics said 85 percent of U.S. oil
and natural gas production in the region could be shut in.
U.S. crude <CLc1> settled up $1.88 to $118.15 a barrel,
adding to two days of gains. London Brent crude <LCOc1> gained
$1.59 to settle at $116.22 a barrel.
Gold ended higher as oil prices rose, boosting the precious
metal's appeal as an inflation hedge.
Gold <XAU=> was last quoted at $826.05/827.45 in New York.
"I don't see the market as all bullish though, and should
the tropical storm create fewer problems than expected, the
sell-off could be immediate," said Philip Carlsson, Saxo Bank's
global products manager for futures and options.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose 2/32 to yield 3.77 percent. The 30-year U.S. Treasury bond
<US30YT=RR> rose 1/32 to yield 4.39 percent.
The dollar fell against major currencies, with the U.S.
Dollar Index <.DXY> off 0.28 percent at 77.025. Against the
yen, the dollar <JPY=> rose 0.02 percent at 109.60.
dollar/treas
Asian exporter shares fell as oil prices rose and the
outlook for developed economies soured.
Japan's Nikkei share average <> ended down 0.2
percent, closer to a five-month low touched on Friday.
Outside Japan, stocks in the Asia-Pacific region
<.MIAPJ0000PUS> rose 0.8 percent.
(Reporting by Richard Leong, Nicholas J. Olivari, Chris Reese
and Frank Tang in New York, Jane Merriman and Ian Chua in
London and Peter Starck in Frankfurt
(Writing by Herbert Lash. Editing by Richard Satran)
