* U.S. stocks slip after 6-day rally; Europe at new high
* U.S. dollar hits 2-month high vs yen, rises vs euro
* U.S. bond prices up after well-received 5-year auction
* Oil rises slightly on U.S. cold weather, inventories
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 29 (Reuters) - The dollar gained against
most major currencies on Tuesday on continued signs of a
better U.S. economy, while oil prices rose slightly on cold
U.S. weather and expectations of a further decline in U.S.
inventories.
But U.S. stocks slipped in a low-volume session even after
data showed a rise in consumer confidence. A housing report
failed to back up that optimism and kept the Dow, S&P 500 and
Nasdaq from posting a seventh straight day of gains. For
details, see: []
"It's good to see confidence higher than expected, but
you'll need improvement in home prices if you want to see the
financial and broader market improve over the next six to 12
months," said Chad Morganlander, portfolio manager at Stifel,
Nicolaus & Co in Florham Park, New Jersey.
Earlier in Europe, regional shares notched a new closing
high for 2009 and Asian stocks rose on growing investor
optimism about the global economic recovery.
Traders and analysts warned against drawing too many
conclusions from price fluctuations this week, noting that a
few large trades can alter a market's direction.
Trading volume on Wall Street was the lowest for the year,
according to Birinyi Associates. The day's decline came after
six days of gains, with the benchmark Standard & Poor's index
up 25 percent for the year.
The Dow Jones industrial average <> dipped 1.67
points, or 0.02 percent, to close at 10,545.41. The Standard &
Poor's 500 Index <.SPX> fell 1.58 points, or 0.14 percent, to
1,126.20. The Nasdaq Composite Index <> slipped 2.68
points, or 0.12 percent, to end at 2,288.40.
U.S. Treasury debt prices rose following a decently
attended $42 billion auction of five-year notes and upbeat
consumer confidence data. The Treasury Department plans to
issue a total of $118 billion in new debt. []
"Given the amount of supply we have to bid on, the market
is putting in a good performance," said Mary Ann Hurley, vice
president of fixed-income trading at D.A. Davidson & Co in
Seattle.
OIL AND BONDS UP, GOLD TUMBLES
U.S. heating oil futures led energy prices higher as
cold weather hit the U.S. Northeast, the world's largest
heating oil market. Temperatures were expected to average
below normal in the region through Friday. []
"Cold weather and expectations for additional draws in
crude and distillate stocks supported, while the stronger
dollar and weak gasoline demand acted as a drag," said Tom
Bentz, analyst at BNP Paribas Commodity Futures Inc in New
York.
An updated Reuters poll of analysts forecast weekly data
will show U.S. crude inventories fell by 2 million barrels
last week as refiners drew down stocks for year-end tax
reasons.
Year-end buying from asset managers and a rise in U.S.
consumer confidence in December to a three-month high
bolstered the dollar. For an economic wrap, click on
[].
"We had a decent consumer confidence report and that
helped the dollar. For about a month now, we've had this
dynamic where good economic news is starting to support the
dollar," said Boris Schlossberg, director of currency research
at GFT in New York.
U.S. crude for February delivery <CLc1> rose 10 cents to
settle at $78.87 a barrel. In London, Brent crude for February
<LCOc1> gained 32 cents to settle at $77.64 a barrel.
U.S. Treasury debt prices advanced.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
up 11/32 in price to yield 3.81 percent. The 2-year U.S.
Treasury note <US2YT=RR> was up 1/32 in price to yield 1.10
percent.
Gold dropped, snapping a three-session winning streak, as
a resurgent dollar dampened bullion's appeal as a hedge
against paper currency depreciation. []
U.S. gold futures for February delivery <GCG0> slid $9.80
to settle at $1,098.10 an ounce in New York.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.26 percent at 77.833.
The euro <EUR=> was down 0.25 percent at $1.4346. Against
the yen, the dollar <JPY=> was up 0.47 percent at 92.02.
The Reuters-Jefferies CRB index <.CRB> at one point hit
285.37, its highest level since mid-October 2008, after
tracking a steady rise in crude oil prices. But the index
later fell, ending the session down 0.3 percent at 283.73.
NIKKEI AT 4-MO. HIGH ON RECORD DATE
Japan's Nikkei average <> edged higher to finish at
10,638.06, its highest close in four months, lifted partly by
gains in oil and metals prices.
Tuesday marked the 20th anniversary of the Nikkei reaching
a record high of 38,915.87, which was the peak of Japan's
bubble in asset prices.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose just over 0.6 percent in thin trade.
(Reporting by Matthew Robinson and Emily Flitter in New York;
Chris Baldwin, Dominic Lau, Kirsten Donovan and Jonathan Saul
in London; Writing by Herbert Lash; Editing by Jan Paschal)
Reuters Messaging: herb.lash.reuters.com@reuters.net; +1 646
223 6019))
