* Global stocks rise
* Oil below $40 a barrel, gold drops below $868 an ounce
* Euro gains on dollar, near parity versus British pound
By Daniel Bases
NEW YORK, Dec 30 (Reuters) - Grim U.S. economic data nudged
the U.S. dollar lower versus the euro on Tuesday, while bargain
hunters boosted global share prices, helped by news of
government aid for U.S. auto and mortgage lender GMAC.
"With (stock) valuations looking as they are at the moment,
2009 could be an opportunity to pick up cheap stocks with a
five-year view," said Angus Campbell, head of sales at
London-based Capital Spreads.
Late on Monday the White House said it was buying $5
billion in GMAC equity and increasing its loan to beleaguered
General Motors by $1 billion as part of its U.S. auto industry
bailout.
Stock in GM, stake-holder in GMAC which provides the bulk
of financing for its car buyers and dealers, rose 4.44 percent
to $3.76 a share <GM.N>.
Stock market investors shrugged off U.S. economic reports
that were anything but celebratory heading into the final full
trading day of 2008.
U.S. consumer confidence fell to a record low in December.
At the same time prices for U.S. single-family homes fell 18
percent in October versus a year ago, according to the Standard
& Poor's/Case-Shiller Home Price Indices.
"The bear market continues; home prices are back to their
March 2004 levels," said David M. Blitzer, Chairman of the
Index Committee at S&P said in a statement.
(For more on the U.S. economy, click on [].
The Dow Jones industrial average <> rose 115.96 points,
or 1.37 percent, at 8,599.89. The Standard & Poor's 500 Index
<.SPX> gained 11.82 points, or 1.36 percent, at 881.24. The
Nasdaq Composite Index <> climbed 27.15 points, or 1.80
percent, at 1,537.47.
The S&P 500, down 40 percent this year, is poised for its
second worst annual performance on record. It fell 47.1 percent
in 1931.
"The bulls believe the amount of cash on the sidelines will
start to come back into the market in the new year as
portfolios are reallocated more towards equities and out of
cash, which is earning nothing," said Tim Ghriskey, chief
investment officer of Solaris Asset Management in Bedford
Hills, New York.
SOLID TONE IN WORLD STOCKS
The U.S. government cash infusion for General Motors <GM.N>
and GMAC set a solid tone for world share prices on what is the
last full trading day of the year for some financial markets,
many of whom will post close to their worst performances on
record.
Japan's Nikkei average <> closed up on the day but
down 42 percent in 2008, the worst in its 58-year history.
Japan's Nikkei rose 1.3 percent to close out the year at
8859.56 <>.
European stocks closed higher, led by gains in energy
companies despite crude oil prices falling due to diminished
demand prospects.
The pan-European FTSEurofirst 300 index <> closed up
1.7 percent to 824.47 points, but is still down 45.41 percent
for the year.
A number of European exchanges will be open for only half a
day on Dec. 31, including London and Euronext's Paris, Brussels
and Amsterdam bourses.
GAZA FEARS EASING
Investor fears stemming from Israel's bombardment of Gaza
appeared to be easing.
Israel rejected any truce with Hamas Islamists on Tuesday
and said it was ready for "long weeks of action" on a fourth
day of the fiercest air offensive in the Gaza Strip in
decades.
Crude oil fell $0.71 or 1.17 percent to $39.31 <CLc1>. Oil
is heading for a loss of nearly 60 percent in 2008 after
reaching an all-time high earlier in the year.
Profit taking knocked gold back from Monday's 11-week high.
It fell $9.95 an ounce, or 1.13 percent to $867.55 <XAU=>.
On currency markets, the dollar fell 0.83 percent against a
basket of major trading-partner currencies <.DXY>. The euro
gained 1 percent to $1.4116 <EUR=> and the dollar fell 0.29
percent to 90.30 yen <JPY=>.
Sterling <GBP=> fell as low as $1.4385, its weakest level
since early 2002. The euro again flirted with parity against
Britain's pound <EURGBP=>, rising 1.51 percent to 97.91 pence.
Benchmark 10-year U.S. Treasuries rose 4/32 of a point in
price to push the yield down to 2.09 percent <US10YT=RR>.
Investors booked profits after Two- and 10-year euro zone
government bond yields fell to their lowest levels in nearly
two decades, capping bumper annual returns due to a grim
economic outlook.
European Central Bank President Jean-Claude Trichet told a
German newspaper risks to growth were on the downside but the
ECB was not pre-committed to any course of action.
Two-year yields <EU2YT=RR> have fallen 50 percent since
January, while 10-year yields <EU10YT=RR> are a third lower
than at the start of the year as investors sought less risky
assets and as interest rates were slashed.
Two-year bond yields fell intra-day to 1.691 percent, their
lowest level since the introduction of the euro in January
1999, but were last at 1.78 percent, up 4 basis points on the
day.
(Additional reporting by Jeremy Gaunt, Rebekah Curtis, Kirsten
Donovan, Dominic Lau, Atul Prakesh and George Matlock in
London; Elaine Lies in Tokyo; Vivianne Rodrigues, Deepa
Seetharaman in New York)
