* U.S. stocks slip despite demand signs from Intel, Dell
* U.S. dollar rises vs euro; risk trades still in focus
* Bonds rise as choppy stocks revive safe-haven bid
* Oil rises slightly on optimism recession is ending
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Aug 28 (Reuters) - U.S. stocks skidded on Friday
as a downbeat consumer sentiment report overshadowed solid
corporate news and rising equity markets in Europe and Asia,
while oil rose slightly on weakening hopes of recovery.
The dollar rose against the yen and euro in light trade as
mixed economic reports from around the world left traders
guessing about the underlying health of the global economy.
[]
The weak reading on U.S. consumer sentiment and a modest
rise in consumer spending revived a safety bid for government
bonds, helping U.S. Treasury debt prices mostly rise.
[]
While investors booked profits after the Dow's eight-day
winning streak ended, the Nasdaq eked out a tiny gain, helped
by strong results and outlooks at technology bellwethers Intel
Corp <INTC.O> and Dell Inc <DELL.O>.
But many investors now believe expectations for a
sustainable recovery have outstripped supporting evidence,
traders said.
"This market has about as much good news baked into as it
can take. We're at that point now where there is no more good
news that could come out that can really juice this market,"
said Angel Mata, managing director of listed equity trading at
Stifel Nicolaus Capital Markets in Baltimore.
Shares of chip maker Intel <INTC.O> rose 4.0 percent after
it raised its third-quarter revenue outlook on
stronger-than-expected demand for microprocessors.
Dell gained 2.0 percent after at least nine brokerages
raised their price targets on the computer maker.
U.S. stocks slid into negative territory after initially
spiking to 10-month highs on consumer sentiment data that while
better than earlier in August, still fell to a reading of 65.7,
the lowest since April.
"Expectations are higher and any kind of data that doesn't
exceed forecasts with rosy numbers can't move the market," said
Alan Lancz, president of Alan B. Lancz & Associates in Toledo,
Ohio.
The Dow Jones industrial average <> closed down 36.43
points, or 0.38 percent, at 9,544.20. The Standard & Poor's 500
Index <.SPX> fell 2.05 points, or 0.20 percent, at 1,028.93.
The Nasdaq Composite Index <> rose 1.04 points, or 0.05
percent, at 2,028.77.
Oil prices rose slightly amid lingering optimism that the
recession is ending, spelling a rebound in ailing world energy
demand. []
U.S. crude for October <CLc1> rose 25 cents to settle at
$72.74 a barrel, while London Brent <LCOc1> advanced 28 cents
to $72.79 a barrel.
Gold hit a three-week high above $960 an ounce on the back
of strong investment demand and buying linked to the initial
dollar weakness, but the lackluster U.S. consumer sentiment
data prompted profit-taking. []
Government debt prices were higher on both sides of the
Atlantic, as sustainability concerns in Europe outweighed gains
in the region's equity markets. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
5/32 in price to yield 3.45 percent.
"Investors still have to be worried about the
sustainability of the recovery. It's clear to me that we cannot
count on growth through next year as long as consumers are
still on the ropes," said Christopher Low, chief economist at
FTN Financial in New York.
The euro fell along with U.S. stocks. The dollar tends to
rise along with risk aversion because investors buy it as a
safe haven or exit trades that had been financed with cheap
dollars.
The dollar rose 0.1 percent to 93.55 yen <JPY=> while the
euro slipped 0.2 percent at 133.74 yen <EURJPY=>. It was down
about 0.4 percent at $1.4296 <EUR=>.
Shares in Europe hit a 10-month closing high on optimism
for a global economic recovery, while the strong demand outlook
from Intel and Dell boosted shares of Nokia <NOK1V.HE>.
[]
Britain's leading share index <> closed 0.8 percent
higher and the FTSEurofirst 300 index <> of top European
shares rose 1.1 percent to 978.34 points, its highest close
since Oct. 7.
Most Asian equity markets edged higher, led by technology
shares as confidence in a sustainable recovery grew. Japan's
Nikkei share average <> finished up 0.6 percent, just shy
of the highest intraday level since Oct 6. MSCI's index of Asia
Pacific stocks outside Japan rose 1.0 percent <.MIAPJ0000PUS>.
(Reporting by Richard Valdmanis, Gertrude Chavez-Dreyfuss,
Richard Leong and Rodrigo Campos in New York; Jessica Mortimer,
Brian Gorman in London; writing by Herbert Lash)
