* U.S. stocks rise after steep sell-off; GE shares shine
* Oil falls 4 pct, down $100 from July record of $147.27
* Euro advances versus U.S. dollar, buoyed by Wall Street
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 2 (Reuters) - U.S. stocks snapped back on
Tuesday, a day after a massive sell-off, as investors scooped
up beaten-down shares and oil fell more than 4 percent after an
OPEC pledge to cut output was only partially fulfilled.
Fear of a prolonged global recession also helped drive down
both crude prices and the yield on U.S. government debt, which
hovered near record lows last seen more than five decades ago.
But rising stocks encouraged investors to emerge from the
perceived shelter of U.S. assets, leading the U.S. dollar to
fall against the euro and a basket of currencies.
Equity markets continued to drive investor sentiment even
as the focus remained on bargain hunting in the shares of
financial services and energy companies.
News on Monday that the United States has been in a
recession since last December added to fears the global economy
is in the throes of a deepening and protracted downturn.
"Fears of a deep global recession continue to linger over
the markets like a dark cloud as traders try to ascertain not
only the deepness of the slowdown but how long it will take for
the recovery to take hold," said Chris Jarvis, senior analyst
at Caprock Risk Management in Hampton Falls, New Hampshire.
In such a scenario, Jarvis said, "crude oil remains on its
slippery slope, looking for direction and a bottom as is the
case with the majority of the asset classes."
Financial stocks surged on Wall Street after suffering
their worst one-day loss on record on Monday. Federal Reserve
Chairman Ben Bernanke signaled on Monday that policy-makers
were determined to stabilize the economy and markets.
The S&P Financial Index <.GSPF> rose almost 8 percent.
Energy stocks, currently the cheapest S&P sector in
relation to earnings, rebounded despite the dip in oil prices.
Shares of General Electric shares jumped 13.6 percent as
the company pledged to leave its dividend intact in a tough
economy, even though GE said it expects profit in the fourth
quarter to come in at the low end of a prior forecast.
"There's been concern about GE defending its triple-A
credit rating at its financing unit. ... The company is taking
steps to bolster that unit, which will help protect its
dividend," said Brian Gendreau, an investment strategist in New
York for ING Investment Management Americas. "This is helping
to pull the market higher."
The jump in GE shares marked the biggest one-day gain for
the stock since at least 1981. The stock's dividend based on
Monday's closing stock price is yielding 8 percent.
The Dow Jones industrial average <> closed up 270.00
points, or 3.31 percent, at 8,419.09. The Standard & Poor's 500
Index <.SPX> rose 32.60 points, or 3.99 percent, at 848.81. The
Nasdaq Composite Index <> climbed 51.73 points, or 3.70
percent, at 1,449.80.
Stocks pared some gains after General Motors <GM.N>
reported U.S. vehicle sales declined 41 percent in November.
In Europe, the FTSEurofirst 300 <> index of top
regional shares closed up 1.9 percent at 825.31 in a volatile
session.
Banks added the most points to the index, although stocks
within the sector were mixed, followed by energy stocks.
Oil prices are now down $100 a barrel from an all-time peak
in July, driven lower by the gloomy economic outlook and news
that the Organization of Petroleum Exporting Countries made
only two-thirds of pledged supply cuts in November.
U.S. crude <CLc1> settled at $46.96 a barrel, down $2.32 or
4.71 percent, the lowest settlement since May 2005.
London Brent <LCOc1> traded down $2.33 at $45.64 a barrel.
Gold ended about 1 percent higher on a weaker dollar and
stronger equities performance.
U.S. gold futures for February delivery <GCG9> settled up
$6.50 at $783.30 an ounce in New York.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> down 0.44 percent at 86.639.
Against the yen, the dollar <JPY=> rose 0.05 percent at 93.26.
The euro <EUR=> rose 0.67 percent at $1.2709.
"There seems to be reduced risk aversion in the market
because of the rally in equities and that has pressured the
dollar against the euro and weighed on the yen," said Matthew
Strauss, senior currency strategist, at RBC Capital Markets in
Toronto.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
14/32 in price to yield 2.68 percent. The 2-year U.S. Treasury
note <US2YT=RR> was little changed, yielding 0.92 percent.
Asian equities slid overnight. The MSCI index of
Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> was off 4.1
percent, taking this year's losses to nearly 60 percent.
Japan's Nikkei average <> tumbled 6.4 percent as the
yen's surge added to the pain for the country's big exporters,
(Reporting by Ellis Mnyandu, Gertrude Chavez-Dreyfuss and
Chris Reese in New York and Kirsten Donovan, Christopher
Johnson, Joanne Frearson and Jan Harvey in London; writing by
Herbert Lash; Editing by Leslie Adler)
