(Refiles to revise phrasing in paragraphs 4 and 5)
* US dollar index hits 3-yr trough, approaches record low
* Gold jumps to lifetime high, silver at 31-year peak
* Strong U.S., European corporate results lift stocks
* Disappointing U.S. data supports Treasury debt prices
(Updates with Wall Street closing levels, adds quote)
By Richard Leong
NEW YORK, April 21 (Reuters) - The U.S. dollar tumbled to
a three-year low against major currencies on Thursday and gold
prices surged to a record high as investors flocked to
investments that are less reliant on the U.S. economy.
Strong U.S. and European corporate earnings propelled
world stocks to a 33-month high. Many U.S. companies have huge
chunks of business outside the country, where demand and
investments are growing, providing a cushion as the U.S.
economy shows signs of slowing again due to weak job growth
and rising oil prices.
The dollar's decline accelerated this week after a warning
by Standard & Poor's on the United States' massive debt load
and as the economy showed signs of slowing. Equities markets,
however, were largely unaffected by S&P's warning.
The dollar has already been hurt by the Federal Reserve's
near-zero interest-rate policy and overseas central banks'
diversification from the U.S. currency, despite the festering
fiscal problem in Europe. For details, see []
S&P said on Monday it might take away the United States'
coveted AAA credit rating within two years if Washington fails
to achieve a plan to slash its $14 trillion debt load.
"All these factors are just dollar negative," said Jessica
Hoversen, currency and bond analyst at MF Global in New York.
"Barring something happens in Europe, the dollar will probably
continue to turn lower."
But in noting Wall Street's resilience, she added, "Stocks
are not backed by the credibility of the dollar and so many
U.S. companies are multi-national."
Emboldened investors are now piling back into riskier
assets, though some analysts advised caution as worries about
the euro zone's debt crisis and problems in the supply chain
following the Japanese earthquake stayed in the background.
Expectations that the U.S. central bank will keep interest
rates at near zero for the foreseeable future, even as other
major central banks raise rates or are about to tighten, have
pressured the dollar in recent weeks.
The dollar index <.DXY> was down 0.4 percent at 74.092
after falling to 73.735, its lowest level since August 2008.
Light holiday trading volume magnified foreign central banks'
gradual reduction of the U.S. dollar from their reserves.
Technical charts suggested the U.S. dollar index could
move toward a record low of 70.698 hit in 2008. []
U.S. financial markets will be closed Friday for Good
Friday, while British markets will be closed both Friday and
Monday for the long Easter weekend.
STOCKS AND GOLD ADVANCE
The weak greenback and inflation concerns raised the
appeal of gold. Spot gold <XAU=> hit a record high at
$1,508.75 before paring gains, while spot silver <XAG=> soared
to a 31-year high at $46.68 an ounce. []
"People want hard assets and that's what people are
comfortable with," said Randy Billhardt, head of institutional
sales and trading at MLV & Co. in New York.
Investors snapped up stocks as strong earnings
overshadowed weaker-than-expected economic data from Germany
and the United States.
The MSCI All-Country World Index <.MIWD00000PUS> rose for
a third straight day. It was up 0.8 percent, touching a high
of 350.83, a level last seen in July 2008.
Wall Street posted its first positive week in three, as
blowout results from Apple and strong results from a number of
industrial companies kept sentiment on the bullish side.
The Dow Jones industrial average <> was up 52.45
points, or 0.42 percent, at 12,505.99. The Standard & Poor's
500 Index <.SPX> was up 7.02 points, or 0.53 percent, at
1,337.38. The Nasdaq Composite Index <> was up 17.65
points, or 0.63 percent, at 2,820.16. []
The FTSEurofirst 300 <> index of top European shares
ended up 0.4 percent.
Asian shares climbed to their highest since January 2008.
The MSCI Asia ex-Japan index <.MIAPJ0000PUS> gained 1.3
percent, while Japan's Nikkei <> closed up 0.8 percent.
Oil prices rebounded from earlier losses linked to weak
data on U.S. jobs and regional manufacturing. U.S. June crude
futures <CLc1> rose 84 cents to settle at $112.29 a barrel.
[]
"It's two steps forward, one step back. I don't see
anything in them that's concerning for the general direction
of the economy," said Jim Baird, chief investment strategist
at Plante Moran Financial Advisors in Kalamazoo, Michigan.
Thursday's U.S. economic reports supported the Treasury
bond market, reinforcing expectations that the Fed, which
holds a policy meeting next week, will pledge to keep interest
rates low well into next year.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
up 4/32 in price to yield 3.39 percent, down 0.01 percentage
point from late on Wednesday. []
The weaker outlook also reduced investors' expectations on
U.S. inflation. The five-year breakeven rate, which is the
yield gap between five-year Treasury Inflation-Protected
Securities and regular five-year government debt, fell to 2.31
percent, down 0.03 percentage point from late Wednesday.
(Additional reporting by Wanfeng Zhou, Karen Brettell, Frank
Tang and Robert Gibbons, Editing by Chizu Nomiyama, Leslie
Adler and Jan Paschal)
