* Markets rebound, helped by U.S. pending home sales data
* U.S. stock gains led by energy shares
* Yen drops on uncertainty after Japanese leader resigns
* Bond prices dip as equity rally curbs safe-haven bid
* Oil rises as U.S. home sales data expand, equities firm
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, June 2 (Reuters) - U.S. stocks rallied more than
2 percent on Wednesday as energy shares rebounded one day after
a steep sell-off, while the yen fell after the resignation of
Japanese Prime Minister Yukio Hatoyama raised concerns about
the outlook for the currency.
Surprisingly strong U.S. housing data for April drove
optimism about the economy, also boosting stocks and driving up
oil prices. The stock rally also eased concerns that Europe's
sovereign debt crisis could restrain a fragile economic
recovery. For details see: []
U.S. government debt prices slid as rising stocks offered a
semblance of stability for jittery investors and curbed the
appetite for safe-haven bonds. []
Pending sales of previously owned U.S. homes topped
expectations in April to hit a six-month high, according to an
industry survey, sparking investors to snap up shares that
tumbled during Tuesday's sell-off.
Investors seized on the housing data as a reason to get
back into equities, which were down about 12 percent from a
recent peak in April.
"The fact that the market is reacting to a data point that
some people feel deserves a pretty big footnote is indicative
of a market that does seem to be skewed to the oversold side,"
said Craig Peckham, equity trading strategist at Jefferies & Co
in New York.
The Dow Jones industrial average <> closed up 225.52
points, or 2.25 percent, at 10,249.54. The Standard & Poor's
500 Index <.SPX> rose 27.67 points, or 2.58 percent, at
1,098.38. The Nasdaq Composite Index <> gained 58.74
points, or 2.64 percent, at 2,281.07
"This is a bit of a relief recovery after yesterday and the
strongest symptom of that is the action we're observing in the
energy sector," said Lawrence Creatura, portfolio manager at
Federated Clover Investment Advisors in Rochester, New York.
The S&P energy index <.GSPE> gained 4.3 percent. Shares of
Halliburton rose 12 percent after executives said the offshore
oil industry had plenty of work even as the Obama
administration imposed a six-month moratorium on deep-water
drilling. For details, see []
Major automakers posted double-digit U.S. sales gains in
May from depressed levels a year earlier, including Ford Motor
Co <F.N>, which rose 3.9 percent to $11.85. []
The National Association of Realtors said its Pending Home
Sales Index, based on sales contracts signed in April,
increased 6.0 percent, to 110.9, as prospective home owners
took advantage of a popular home buyer tax credit ahead of its
expiration on April 30. []
Analysts polled by Reuters had forecast pending home sales
would rise 5.0 percent.
But falling demand for home loans pointed to ebbing
activity in the vital housing market due to the expiration of a
popular tax credit for buyers. []
MSCI's all-country world equity index <.MIWD00000PUS> pared
earlier losses to rise 1 percent.
The yen hit a two-week low against the U.S. dollar after
Hatoyama and his deputy resigned to try to boost the ruling
party's faltering fortunes in an election next month.
[]
Hatoyama's expected replacement, Finance Minister Naoto
Kan, earlier this year said he wanted the yen to weaken more
and that most businesses favored a dollar/yen rate around 95
yen. Since then he has mostly toed the Finance Ministry line
that stable currencies are desirable and markets should set
foreign exchange levels.[]
"Kan is a noted dove who has been an aggressive proponent
of a lower yen in order to help stimulate Japanese exports,"
said Boris Schlossberg, a director of currency research at GFT,
in New York.
The dollar was up 1.2 percent at 92.12 against the yen
<JPY=> Against a basket of major currencies, the U.S. Dollar
Index <.DXY> up 0.15 percent at 86.722.
The euro <EUR=> was up 0.10 percent at $1.2237, paring
earlier losses.
European Central Bank board member Christian Noyer was
cited as saying the single currency's exchange rate against the
greenback was around a 10-year average and "by no means an
unusually low level." []
Gold slipped as some investors cashed in on the previous
session's run to a two-week high and as risk aversion
dissipated upon release of the U.S. housing data.
[]
U.S. gold futures for August delivery <GCQ0> on the COMEX
division of the New York Mercantile Exchange lost $4.30 to
settle at $1,222.60 an ounce.
U.S. crude for July <CLc1> settled up 28 cents a barrel, or
0.4 percent, to $72.86, after losing nearly 2 percent on
Tuesday. Oil had risen as high as $73.93 a barrel, but pared
some gains by afternoon settlement.
Europe's ICE Brent <LCOc1> settled up $1.04 a barrel to
$73.75.
"The pending home sales helped the stock market and oil,"
said Richard Ilczyszyn, senior market strategist at
Lind-Waldock in Chicago.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 21/32 in price to yield 3.34 percent.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> fell 0.6 percent. Japan's Nikkei stock average
<> fell nearly 1 percent, surrendering some early gains.
(Reporting by Joshua Schneyer, Nick Olivari, Vivianne
Rodrigues, Richard Leong in London; Ian Chua, Emma Farge,
Harpreet Bhal in London; Writing by Herbert Lash; Editing by
Leslie Adler)
