* Oil boosted by heating oil demand; gold up
* Dollar hits record low vs Swiss franc, falls vs yen
* Markets volatile, thin in holiday season
(Updates with U.S. closing prices, Nikkei futures)
By Manuela Badawy
NEW YORK, Dec 28 (Reuters) - Global stocks edged higher on
Tuesday on expectations the U.S. economy is on track for
recovery while oil prices edged close to a 26-month high as
winter weather drove demand.
The dollar hit a record low against the Swiss franc and
tumbled against the yen after Japan reported its factory output
rose in November for the first time in six months.
U.S. Treasury prices fell after a weak $35 billion auction
of five-year notes and ahead of an auction of seven-year notes
on Wednesday.
Trading volumes in all markets were light due to the
post-Christmas holiday and as the northeastern United States
dug out from a blizzard that disrupted travel.
"Data in recent weeks have been supportive of the stocks
and commodity markets globally," said David Cohen, director of
Asian Economic Forecasting at Action Economics. "The U.S. will
avoid a double-dip. The Asian region, including Japan, looks a
little bit better, with its industrial production finally
showing an increase."
In New York, the Dow and S&P 500 ticked higher as the cold
weather in the Northeast lifted oil prices and energy shares.
The MSCI All Country World index <.MIWD00000PUS> rose 0.16
percent while the Thomson Reuters global stock index
<.TRXFLDGLPU> gained 0.02 percent.
But investors were reluctant to take large new positions
after weaker-than-expected U.S. data on consumer confidence and
home prices.
U.S. single-family homes fell almost double the expected
pace in October, according to S&P/Case Shiller home prices
indexes, while a report from the Conference Board, an industry
group, showed an unexpected deterioration of consumer
confidence in December as worries about jobs increased. For
details, see [] []
Despite the disappointing data, "it's not impacting the
market so much due to the light volume and lack of activity,"
said Peter Cardillo, chief market economist at Avalon Partners
in New York.
The Dow Jones industrial average <> closed up 20.51
points, or 0.18 percent, at 11,575.54. The Standard & Poor's
500 Index <.SPX> was up 0.98 points, or 0.08 percent, at
1,258.52. The Nasdaq Composite Index <> was down 4.39
points, or 0.16 percent, at 2,662.88.
Both Chevron Corp <CVX.N> and Exxon Mobil <XOM.N> touched
52-week highs, with Chevron adding 1.2 percent to $91.19 and
Exxon climbing 0.6 percent to $73.42. Both companies are Dow
components.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.3 percent at 1,140.44 points. Volume was
extremely low at just one-quarter of the 30-day average. Many
traders closed their books for the year, while a holiday in
Britain and the bad weather in the U.S. Northeast thinned
trading floors. The UK market will reopen on Wednesday.
Shares in Japan and China eased on Tuesday on concerns
further Chinese monetary tightening will cool growth in China,
which has been the engine of world economic growth. Those
worries overshadowed the rise in Japanese factory output in
November, which pointed to improving demand.
The front month futures contract for the Nikkei 225 stock
index <0#NK:> trading in Chicago fell 30 points to 10.325.
The dollar was flat against major currencies <.DXY>, while
the euro <EUR=> fell 0.34 percent at $1.3114 after climbing as
high as $1.3274 overnight.
The dollar also hit an all-time low against the Swiss franc
<CHF=EBS> at around 0.9435 francs on year-end buying by Swiss
corporates.
The yen rallied against the dollar after the Japanese
factory data. Against the Japanese yen, the dollar <JPY=> was
down 0.43 percent at 82.43.
COMMODITIES RALLY, BONDS EYED
Crude oil prices <CLc1> settled up 0.54 percent at $91.49 a
barrel, just shy of the $91.88 reached on Monday -- the highest
level since October 2008, boosted by demand for heating oil
after one of biggest snowstorms on record hit the U.S. East
Coast.
Spot gold prices <XAU=> rose $21.26, or 1.54 percent, to
$1,404.80 an ounce.
"Both oil and gold are seeing robust demand. The market
seems to have shrugged off the interest-rate hike in China over
the weekend," said Dean Popplewell, chief strategist of FX
brokerage OANDA in Toronto.
U.S. government bonds were mixed ahead of Wednesday's $29
billion auction of seven-year notes, which will likely need to
price at a higher yields to attract interest.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 41/32, with the yield at 3.4873 percent. The two-year U.S.
Treasury note <US2YT=RR> was up 1/32, with the yield at 0.7512
percent. The 30-year U.S. Treasury bond <US30YT=RR> was down
68/32, with the yield at 4.5299 percent.
(Additional reporting by Chuck Mikolajczak, Wanfeng Zhou, and
Karen Brettell in New York; Editing by Kenneth Barry and Leslie
Adler)
