* Global stocks rise
* Oil below $40 a barrel, gold drops from 11-week high
* Euro gains on dollar, nears 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.
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 $17.4 billion U.S.
auto industry bailout. (For more, click on []).
Stock in GM, a stake-holder in GMAC which provides the bulk
of financing for its car buyers and dealers, rose 5.56 percent
to $3.80 a share <GM.N>.
"The GMAC news is the driver of the lot," said Steve Sachs,
director of trading at Rydex Investments in Rockville,
Maryland.
"The government has been telling us for months that they
will do whatever it takes and there is probably more of it in
store as we get to the inauguration and a few weeks past that,"
he added.
Stock market investors shrugged off U.S. economic reports
that were anything but celebratory heading into the end of a
year mired in recession.
U.S. consumer confidence fell to a record low in December,
contributing to the worst U.S. holiday shopping season since at
least 1970. 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 184.46 points,
or 2.17 percent, to 8,668.39. The Standard & Poor's 500 Index
<.SPX> gained 21.22 points, or 2.44 percent, to 890.64. The
Nasdaq Composite Index <> climbed 40.38 points, or 2.67
percent, to 1,550.70.
The S&P 500, down 39.34 percent this year, is poised for
its second worst annual performance on record. It fell 47.1
percent in 1931.
SOLID TONE IN WORLD STOCKS
The U.S. government cash infusion for General Motors 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 them will post close to their worst performances on
record.
Japan's Nikkei average <> closed up 1.28 percent on
the day to end 2008 at 8,859.56. In 2008 the index fell 42.12
percent, the worst performance in its 58-year history.
European stocks rose, led energy companies despite crude
oil prices falling due to diminished demand prospects.
The pan-European FTSEurofirst 300 index <> closed up
1.74 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 the
Gaza Strip 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 Gaza in decades.
Crude oil fell 99 cents or 2.47 percent to settle at $39.03
<CLc1>. Oil is heading for a loss of nearly 60 percent in 2008
after reaching an all-time high of $147.27 on July 11.
"This market is driven by expectations. With home prices
plunging and consumer sentiment plunging, the outlook for
energy demand and prices can only reflect that," said John
Kilduff, senior vice president at MF Global in New York.
Profit taking knocked gold back from Monday's 11-week high.
It fell $5.90 an ounce, or 0.67 percent to $871.60 <XAU=>.
The dollar lost 0.64 percent against a basket of major
trading-partner currencies <.DXY>. The euro rose 0.65 percent
to $1.4067 <EUR=>. The dollar fell 0.27 percent to 90.32 yen
<JPY=>. For the year the euro is down 3.58 percent against the
euro while the dollar is off 18.88 percent against the yen.
Sterling <GBP=> fell as low as $1.4385, its weakest level
since early 2002 before rebounding to $1.4434, off 0.39 percent
for the day. The euro again flirted with parity against
Britain's pound <EURGBP=>, rising 1.04 percent to 97.45 pence.
Benchmark 10-year U.S. Treasuries rose 1/4 of a point in
price to push the yield down to 2.085 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 bond yields <EU2YT=RR> 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, and Chuck Mikolajczak in New York)
