* U.S. stocks rise on central bank moves, factory data
* U.S. government debt falls after factory activity index
* Oil rises; substantial output from Gulf Coast still shut
* Dollar at 2-week low versus euro after central bank move
(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Sept 18 (Reuters) - Stocks rallied worldwide on
Thursday while the U.S. dollar and government debt fell, their
appeal as havens ebbing after central banks flooded markets
with cash to bolster investor confidence battered by the week's
financial maelstrom.
Following coordinated measures by six of the world's top
central banks to pump more than $180 billion into seized-up
global money markets, oil rose to over $100 a barrel and the
dollar dropped to a two-week low against the euro, while the
yen fell broadly.
The massive burst of liquidity and talk of bank deals
lifted global stock markets and curbed a flight to safety for
bonds and the dollar a day after stocks worldwide plunged on
fears of the turmoil seizing major financial institutions.
"There seems to be more calm in the market but we are not
seeing a complete unwind of safety bids," said Michael Pond,
Treasury strategist at Barclays Capital in New York.
However, persistent demand for "hard" assets like gold and
oil were sign of jitters over the unprecedented market
turbulence, Pond said.
In early morning trade, the Dow Jones industrial average
<> was up 169.36 points, or 1.60 percent, at 10,779.02. The
Standard & Poor's 500 Index <.SPX> was up 23.18 points, or 2.00
percent, at 1,179.57. The Nasdaq Composite Index <> was up
37.53 points, or 1.79 percent, at 2,136.38.
Stocks also were helped by some positive news on the
economic front, with a monthly survey by the Philadelphia
Federal Reserve showing that factory activity in the U.S.
Mid-Atlantic region jumped unexpectedly in September, rising
into positive territory for the first time in 10 months.
Prices for U.S. government debt were lower. The benchmark
10-year U.S. Treasury note <US10YT=RR> fell 6/32 to yield 3.45
percent, and the 30-year U.S. Treasury bond <US30YT=RR> fell
6/32 to yield 4.10 percent.
The dollar fell, after having attracted safe-haven bids in
recent weeks when U.S. investors bailed out of overseas markets
and sent the money back home.
The U.S. Dollar Index <.DXY>, which measures its
performance against a basket of major currencies, was down 0.24
percent at 78.048. Against the yen, the dollar <JPY=> shed 0.40
percent to 105.30.
The euro <EUR=> rose 1.78 percent to $1.437.
Gold rallied, as it is one of the few trustworthy assets
left, a trader said.
"What is left for people to put their money in?" asked
Afshin Nabavi, head of trading at MKS Finance. "They can't
trust the banks, they can't trust insurance companies, they
can't trust the stock markets."
U.S. light sweet crude oil <CLc1> rose $2.06 to $99.22 a
barrel.
(Writing by Herbert Lash, Editing by Chizu Nomiyama)
