* Euro holds near 3-week high versus U.S. dollar
* U.S. debt prices slip in light volume
* Gold hits record on safe-haven demand
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, June 18 (Reuters) - World stocks gained for a
ninth straight day on Friday on improved risk appetite after a
Spanish bond auction eased fears about sovereign debt in Europe
and helped the euro hold near three-week highs.
U.S. and European shares retraced all their losses for the
year as banks in Europe gained even as questions arose over a
pledge by European Union leaders to publish details of "stress
tests" on the health of banks that have been under pressure
from lingering worries about the sovereign debt they hold.For
details see: []
Some analysts said the tests to be published in July would
boost investor confidence in European banks.
U.S. stocks ground higher in light trade, with major
indexes posting a strong week even though housing and labor
market data showed signs of a fragile recovery. But the S&P 500
closed above its 200-day moving average for a third straight
session, which suggests resilience.
For the week, the Dow and the S&P 500 each gained 2.4
percent and the Nasdaq added 3 percent.
"A positive day, but there is still a lot of resistance on
the top side," said Phil Roberts, technical analyst at Barclays
Capital. "It has come a long way without a correction so next
week the market may struggle.
"But in the bigger picture if it continues to consolidate
above the 200-day moving average we could see further gains."
MSCI's all-country world index <.MIWD00000PUS> gained
almost 0.3 percent. The index has rebounded around 7 percent
since its June 7 close and gained about 3 percent this week.
The world index was helped by European shares, which rose
for the eighth consecutive session. It was the longest winning
streak in 11 months.
MSCI's emerging markets counterpart <.MSCIEF> outperformed
and was up almost 0.7 percent.
The Dow Jones industrial average <> closed up 16.47
points, or 0.16 percent, to 10,450.64. The Standard & Poor's
500 Index <.SPX> rose 1.47 points, or 0.13 percent, to
1,117.51. The Nasdaq Composite Index <> added 2.64 points,
or 0.11 percent, to 2,309.80.
Energy shares helped support the Dow and S&P, with some
investors betting that stocks beaten down due to the Gulf of
Mexico oil spill had run their course.
The euro rose 2.1 percent against the U.S. dollar this
week, its best weekly performance since May 2009, as anxiety
about the fiscal health of euro zone countries eased this week
and Spain attracted buyers for an auction of its debt.
Speculators cut short euro positions sharply in the week to
June 15, a period in which the euro rose 3 percent against the
dollar.
After hitting a three-week high above $1.24 on Thursday,
the euro retreated to $1.2373 <EUR=>, unchanged on the day.
The euro slid to a record low <EURCHF=> at 1.3718 Swiss
francs, according to Reuters data, while the dollar hit a
one-month low of 1.1081 francs <CHF=>.
The dollar index <.DXY> was flat at 85.737, after falling
to a one-month low at 85.453.
U.S. Treasury prices drifted lower in light trading as the
market cleaved tightly to a yield range established over the
past week and a half with no economic data to influence
investors. []
The limited strength in equities tugged on Treasuries, as
they continued the highly correlated inverse relationship to
stocks prices seen in recent days.
The benchmark 10-year U.S. Treasury note <US10YT=RR> traded
9/23 lower in price to yield 3.23 percent.
U.S. crude oil prices finished higher after wavering with
U.S. equities, while oil traders' concerns about the danger of
slowing Chinese demand and longer-term deepwater supply risks
weighed on Brent crude and products. []
U.S. crude futures for July <CLc1> rose 39 cents to settle
at $77.18 a barrel.
Front-month August ICE Brent futures <LCOc1> fell 46 cents
to settle at $78.22 a barrel, having traded as low as $77.25
earlier.
U.S. gold futures settled at the highest close ever after
racing to a record level as investors continued to buy precious
metals as an alternative asset after weak U.S. data on Thursday
renewed worries about the pace of recovery, traders said.
U.S. gold futures for August delivery <GCQ0> in New York
climbed to record $1,263.70 an ounce, and settled up $9.60 at
$1,258.30, its highest close.
"It is a case of gold's ability to compete with both credit
and equity markets for investments. Competing with credit
markets has been in play for a long time, because of low
interest rates and low opportunity cost of holding gold," said
Tom Pawlicki, precious metals analyst at MF GLOBAL in Chicago.
(Reporting by Ed Krudy, Wanfeng Zhou, Chris Reese and Carole
Vaporean in New York; Christopher Johnson, George Matlock in
London; Writing by Herbert Lash; Editing by Leslie Adler)
