* Oil rallies to over $73 barrel as data spurs demand hope
* Good demand at U.S. long-bond auction fuels debt rally
* Euro rises above $1.41 as U.S. dollar weakness broadens
* Industrial metals hit 8-month high on demand hopes
(Updates U.S. markets activity)
By Herbert Lash
NEW YORK, June 11 (Reuters) - Global stocks surged and oil
prices rallied to over $73 a barrel on Thursday after upbeat
news from the around the world pointed to an economic
recovery.
Copper, zinc, lead, tin and nickel all jumped to their
highest levels since last October on growing optimism about
demand. A recent spate of improving economic data has helped
lift copper prices by more than 10 percent so far in June;
copper is widely used in construction and automobile
manufacturing.
The euro broke above $1.41 as demand waned for the U.S.
dollar as a safe-haven. And U.S. Treasury prices rose sharply
in a rally fueled by a solid auction of 30-year debt, which
calmed worries over financing the rising U.S. budget deficit.
Data driving markets higher included a rise in U.S. retail
sales in May for the first time in three months, and a drop in
American workers filing new claims for jobless benefits last
week to the lowest level since January. For details
[]
The news bolstered the argument that the severe U.S.
recession was close to bottoming, while surging Chinese
investment in May fueled hopes of a global recovery.
Bank-to-bank dollar funding costs eased in London again,
with the three-month rate retesting a record low as investors
viewed market speculation of a U.S. interest rate hike by
year-end as overdone. []
"The big picture as we see it is that there's fairly
convincing evidence now that the recession is ending. The data
is basically unanimous on that point," said Zach Pandl, an
economist at Nomura Securities in New York.
"But there is still a lot of concern about what the economy
is going to look like on the other side of the recession."
World Bank President Robert Zoellick said the global
economy is set to contract by close to 3 percent this year,
worse than a previous estimate of a 1.75 percent decline.
[]
European equities posted their highest close in five
months, propelled by banking stocks. The FTSEurofirst 300
<> index of top European shares ended 0.89 percent higher
at 887.78 points.
In the United States the Dow closed just under break-even
for the year, after having traded in positive territory for
most of the session.
The Dow Jones industrial average <> closed up 31.90
points, or 0.37 percent, at 8,770.92. The Standard & Poor's 500
Index <.SPX> gained 5.74 points, or 0.61 percent, at 944.89.
The Nasdaq Composite Index <> added 9.29 points, or 0.50
percent, at 1,862.37.
Oil- and commodity-related stocks led the Dow higher, with
Chevron Corp <CVX.N> rising 2.4 percent.
"The rise in oil prices has been helping because the market
is so heavily weighted to energy stocks. Eventually it is going
to hurt, but right now it is helping," said Todd Leone, head of
listed trading at Cowen & Co in New York.
Analysts cautioned, however, that commodity prices may have
risen too far, too fast.
The International Energy Agency said it revised its outlook
for global oil demand higher for the first time since August,
helping crude prices extend a three-day rally to hit an
intraday high of $73.23 a barrel.
Earlier, data from China showed that oil imports into the
world's No. 2 energy user rose 5.5 percent in May from a year
ago, hitting the second-highest volume on record.
[]
U.S. crude <CLc1> rose $1.35 to $72.68 a barrel, the
highest settlement since Oct. 20. London Brent crude <LCOc1>
gained 99 cents to $71.79 a barrel.
The dollar fell broadly, with a basket of major currencies,
the U.S. Dollar Index <.DXY>, down 0.89 percent at 79.556.
The euro <EUR=> was up 0.97 percent at $1.4102, and against
the yen, the dollar <JPY=> was down 0.62 percent at 98.2.
Commodity-linked currencies like the Australian and New
Zealand dollars soared.
Gold futures climbed as the slumping dollar sparked
speculation that its long-term weakness could spur bullion
buying as a hedge against inflation.
The U.S. futures contract for August delivery <GCQ9>
settled up $7.30 at $962 an ounce in New York.
In the U.S. Treasuries market, an $11 billion debt sale was
the first reopening of a 30-year issue since the government
announced in April that it was moving to monthly sales of long
bonds. The sale appeared to benefit from a steep sell-off in
recent days.
The 30-year long bond <US30YT=RR> rose 34/32 in price to
yield 4.69 percent, while the benchmark 10-year U.S. Treasury
note <US10YT=RR> gained 21/32 in price to yield at 3.86
percent.
The rising oil prices powered a sharp rise in
commodity-related shares overnight in Asia.
Japan's Nikkei share average <> poked above the
psychologically key 10,000 mark to an eight-month high but
closed down 0.1 percent over U.S. interest rate worries.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 0.5 percent.
(Reporting by Richard Valdmanis, Edward Krudy, Vivianne
Rodrigues, Burton Frierson and Frank Tang in New York; Ian
Chua, Emelia Sithole-Matarise, Kylie MacLellan, Jan Harvey,
Rebekah Curtis and Pratima Desai in London; Blaise Robinson in
Paris; writing by Herbert Lash; Editing by Leslie Adler)
