* Wall Street jumps as G20 says cheap money to continue
* Oil jumps above $79 on hurricane fears, dollar weakness
* Dollar slides after G20 meeting; euro rises above $1.50
* U.S. bonds firm ahead of $40 billion 3-year note auction
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Nov 9 (Reuters) - Global stocks surged on Monday
and gold hit a new record above $1,110 an ounce, after the
Group of 20 finance ministers pledged to keep economic stimulus
programs in place until a recovery was assured.
The U.S. dollar fell to a 15-month low against a basket of
major currencies, lifting gold prices and the euro above $1.50,
after G20 policy-makers on Saturday underscored the perception
global interest rates will remain low for some time.
See:[]
The message investors took from the G20 meeting in Scotland
was that low rates will provide them access to cheap money with
which to buy riskier assets like stocks, oil and gold.
In the U.S., the Dow Jones Industrial Average rose to a
13-month high as U.S. stocks jumped 2.0 percent or more and
helped dull the allure of government debt.
An index of the U.S. dollar <.DXY> against six major
currencies fell to its lowest since August 2008 and was headed
for its biggest single-day decline in more than three months.
"Central banks around the world are continuing to prop up
the economy and support risk taking. There's very little regard
for valuation," said Jack Ablin, chief investment officer of
Harris Private Bank in Chicago.
"It looks to me like a pure risk rally and it is consistent
with the G20 comments."
The MSCI all-country world index <.MIWD00000PUS> of global
stocks rose 2.3 percent.
The Dow Jones industrial average <> closed up 203.52
points, or 2.03 percent, at 10,226.94. The Standard & Poor's
500 Index <.SPX> rose 23.78 points, or 2.22 percent, at
1,093.08. The Nasdaq Composite Index <> added 41.62
points, or 1.97 percent, at 2,154.06.
U.S. interest rates are expected to remain near zero well
into 2010, and analysts said that would keep the dollar weak.
The precious metal extended last week's gains of nearly 5
percent after the tumbling dollar boosted gold's appeal as a
hedge against a falling currency and potential inflation.
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"There's no risk of the Fed tightening in the near term, so
the dollar is going to get weaker," said Jay Meisler, principal
of Global-View.com, an online forum for investors and traders.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 1.01 percent at 75.057.
The euro <EUR=> was up 0.97 percent at $1.4991, and against
the yen, the dollar <JPY=> was up 0.12 percent at 90.02.
Oil settled above $79 a barrel after Hurricane Ida forced
U.S. oil and gas production in the Gulf of Mexico to be shut as
stocks rose and the dollar fell. []
Ida shut in 29.6 percent of oil production and 27.5 percent
of gas output from the Gulf of Mexico, the U.S. Minerals
Management Service said. []
"Crude is up on the weak dollar and the impact of Tropical
Storm Ida, overshadowing some bearish news of the Saudis
raising supplies available and China raising fuel prices," said
Phil Flynn, analyst at PFGBest Research in Chicago.
U.S. crude for December delivery <CLc1> rose $2 to settle
at $79.43 a barrel. London Brent crude <LCOc1> settled up $1.90
at $77.77.
U.S. government debt prices were steady to modestly higher
after strong demand for Treasury notes. Indirect bids, often
viewed as a proxy for foreign demand, was more than $27 billion
in the record-sized $40 billion auction of three-year notes.
"As the results indicated and as price action showed,
there's just been no let up in the demand for bonds," said Kim
Rupert, managing director of global fixed-income analysis at
Action Economics LLC in San Francisco.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
5/32 in price to yield 3.48 percent.
Spot gold prices <XAU=> rose $9.20 to $1103.80 an ounce.
"Investors have become concerned about the outlook for
paper currencies and also for inflation. The natural move in
this kind of environment is into gold," said Nicholas Brooks,
head of research and investment strategy at ETF Securities.
Copper rallied as demand prospects brightened after Chile's
Codelco, the world's top copper miner, raised premium charges
for Asian customers in 2010. A weaker dollar also helped boost
industrial metals. []
Copper for December delivery <HGZ9> ended up 1.50 cents to
settle at $2.9675 a pound.
Overnight in Asia, the MSCI index of Asia Pacific stocks
outside Japan <.MIAPJ0000PUS> rose 2 percent, while Japan's
Nikkei share average <> finished 0.2 percent higher.
(Reporting by Edward Krudy, Richard Leong and Nick Olivari in
New York; Brian Gorman and Barbara Lewis and George Matlock in
London; writing by Herbert Lash; Editing by Andrew Hay)
