* Rise in U.S. consumer confidence supports stocks
* Lingering fears of faltering economic recovery weigh
* Oil falls 2 pct a barrel to $73.14
* Gold at two-month high, yen near 15-year high
(Updates with European markets' close)
By Walter Brandimarte
NEW YORK, Aug 31 (Reuters) - U.S. stocks gained modestly on
Tuesday after a rise in U.S. consumer confidence offered some
hope to investors, but lingering fears of a double-dip
recession weighed on oil prices and the dollar.
European stocks erased losses but still recorded their
largest monthly decline in August since May. Continued demand
for safe-haven assets pushed the yen to a near 15-year peak and
gold prices to a two-month high.
While U.S. stocks rose modestly, investors worried about
the outlook after recent disappointing economic reports.
"Markets responded to the better-than-expected U.S.
consumer confidence, but the markets have not made their mind
up about the recovery," said Mike Lenhoff, chief strategist at
Brewin Dolphin. "There are still worries about a double-dip
recession."
Tuesday's data showed U.S. consumer confidence rose above
expectations in August while other data reported a
larger-than-forecast increase in prices of U.S. single-family
homes in June also helped. For details, see [].
"Consumer confidence is the second positive surprise we've
had today. Does that mean we've hit the peak of bearishness
yet? If not, we're probably close," said Uri Landesman,
president of Platinum Partners in New York.
"I think these two data points, combined, will prevent what
would've been a pretty bad day."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
See graphs on:
Consumer confidence: http://link.reuters.com/pex48n
Yen versus dollar: http://link.reuters.com/byv86n
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Among the weaker economic reports was one on Tuesday that
business activity in the U.S. Midwest grew less than expected
in August. []
The Dow Jones industrial average <> rose 42.61 points,
or 0.43 percent, to 10,052.34, while the Standard & Poor's 500
Index <.SPX> climbed 3.79 points, or 0.36 percent, to 1,052.71.
The Nasdaq Composite Index <> was up 3.68 points, or 0.17
percent, at 2,123.65.
The MSCI All-Country World equity index <.MIWD00000PUS>
trimmed losses but remained 0.16 percent lower.
The FTSEurofirst 300 index <> of top European shares
eked out a gain of 0.08 percent after falling as much as 1.3
percent on Tuesday. It fell around 2 percent for the month.
YEN NEARS 15-YEAR HIGH
The yen on Tuesday neared a 15-year high against the dollar
and was headed for its fourth monthly rise as the U.S. economic
concerns boosted the safe-haven appeal of the Japanese
currency.
The strengthening of the yen came despite Japan's decision
to expand cheap loans to banks, a symbolic monetary easing move
seen as a sign that authorities may act further to stop the
currency appreciation.
"The policy action by the BoJ isn't going to change the
market's mood. It would probably take intervention to shake
things up a bit," said Vassili Serebriakov, currency strategist
at Wells Fargo in New York.
Around midday New York trade, the dollar was down 0.58
percent against the yen <JPY=> at 84.11. It had earlier fallen
to 84.06, according to Reuters data, not far from its 15-year
low of 83.58 set on electronic trading platform EBS last week.
The euro <EUR=> was up 0.32 percent at $1.2703 .
The dollar was also down 0.24 percent against a basket of
major currencies measured by the U.S. Dollar Index <.DXY>.
U.S. Treasury prices gave back some of their earlier gains
but remained higher in a sign that investors are skeptical of
the U.S. economic outlook.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
13/32 in price, with the yield at 2.4842 percent. The 30-year
bond <US30YT=RR> rose 22/32, with the yield at 3.544 percent.
U.S. crude oil prices <CLc1> fell $1.56, or 2.09 percent,
to $73.14 per barrel, while spot gold prices <XAU=> $10.35, or
0.84 percent, to $1,246.60, their highest since late June.
(Additional reporting by Chuck Mikolajczak, Chris Reese, and
Wanfeng Zhou; Editing by Kenneth Barry)
