* U.S. stocks edge higher on IBM, U.S. economic news
* Dollar slips vs euro as U.S. data raises optimism
* Bond prices slip on April consumer confidence jump
* Oil eases toward $49 a barrel on weakening demand
(Recasts, updates U.S. markets; changes byline, dateline,
previous LONDON)
By Herbert Lash
NEW YORK, April 28 (Reuters) - U.S. stocks rose slightly
but oil slipped on Tuesday as the biggest jump in U.S. consumer
confidence in three years helped offset worries over a
spreading swine flu outbreak and a report that Citigroup and
Bank of America may need more capital.
Data showing a slowing decline in U.S. home prices and the
stronger-than-expected reading on consumer confidence increased
risk appetite, leading the dollar to slip against the euro.
Euro zone government bonds pared gains and U.S. Treasuries
weakened after the Conference Board reported the biggest
one-month rise in consumer confidence since November 2005.
New data also showed U.S. house prices tumbled nearly 19
percent in February from a year earlier but it was the first
time in 16 months the slide did not set a record, according to
the Standard & Poor's/Case-Shiller Home Price Indices.
The numbers bolstered a view that the recession-hit U.S.
economy is at least reaching bottom, even though huge problems
in the financial sector and severe job losses mean growth may
still be a distant prospect. For more see: [].
"The panic phase is behind us with the consumers. The
outlook is not as bad," said Jonathan Basile, an economist at
Credit Suisse in New York. "By itself, it's still not a good
level. For there to be more improvement, this move has to be
confirmed."
U.S. stocks edged higher as a dividend hike at
International Business Machines <IBM.N> and the reassuring
economic data pushed back concerns that Citigroup <C.N> and
Bank of America <BAC.N> may need to raise more money.
The Wall Street Journal, citing people familiar with the
matter, reported that the shortfall amounts to billions of
dollars at Bank of America. []
"IBM is strong, and that is also helping the Dow, and some
tech stocks are a little firmer," said David Bellantonio, head
of trading at Instinet in New York.
"There is not a ton of conviction, but considering the
negative news (on banks) it seems to be pretty good."
Before 1 p.m. (1700 GMT), the Dow Jones industrial average
<> was up 24.53 points, or 0.31 percent, at 8,049.53. The
Standard & Poor's 500 Index <.SPX> was up 2.44 points, or 0.28
percent, at 859.95. The Nasdaq Composite Index <> was up
8.59 points, or 0.51 percent, at 1,688.00.
European stocks fell but closed off session lows as the
U.S. consumer confidence report partly offset worries over
capital needs at American banks and swine flu, which has killed
some 150 people in Mexico.
The FTSEurofirst 300 <> index of top European shares
ended down 1.5 percent at 801.24 points.
Banks took the most points off the index, followed by
mining and industrial engineering stocks, which fell on fears
that a wider outbreak of flu might prolong the recession.
Oil prices pared gains after U.S. stocks rose but investors
were cautiously awaiting the latest supply indications, with
the weekly inventory report from the American Petroleum
Institute due to be released on Tuesday.
U.S. oil futures <CLc1> fell 71 cents to $49.43 a barrel,
off an earlier low of $48.55. London Brent crude <LCOc1> was
down 74 cents at $49.58.
The euro strengthened against the dollar after earlier the
Japanese currency hit a seven-week high against the euro and a
one-month high against the dollar.
The euro <EUR=> rose 0.50 percent at $1.3083.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.25 percent at 85.449.
Against the yen, the dollar <JPY=> fell 0.14 percent at 96.49.
Government debt fell.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 28/32 in price to yield 3.02 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 5/32 in price to yield 0.97
percent.
Gold slipped 2.5 percent in Europe on Tuesday on technical
selling, with traders disappointed over its failure to sustain
a rally to a near four-week high the previous session.
Asian stocks dropped for a second day with investors
fretting about the potential economic fallout if the swine flu
outbreak becomes a pandemic.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> fell 2.3 percent and Japan's Nikkei average
<> shed 2.7 percent.
(Reporting by Rodrigo Campos, Leah Schnurr, Nick Olivari and
Ellen Freilich in New York, Joe Brock and George Matlock in
London and Peter Starck in Frankfurt; Writing by Herbert Lash;
Editing by James Dalgleish)
