* Dollar rallies broadly after stronger U.S. consumer data
* Oil slips to near $70 a barrel, a 2-month low, on dollar
* U.S. stocks overcome dollar carry worries to post gains
* Bonds fall on improved prospects for economic recovery
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 11 (Reuters) - A U.S. dollar rally on Friday
pulled down oil prices while Wall Street stocks mostly moved
higher after a strong batch of economic reports boosted
optimism that the American economy is on the path to recovery.
The dollar surged to a two-month high against the euro
after data showed U.S. consumers stepped up their spending in
November and grew more optimistic this month. The data lifted
hopes a sustainable recovery was starting to unfold. For
details, see: [] []
The euro at one point fell to $1.4587 <EUR=>, according to
Reuters data, the lowest since early October.
U.S. stocks pared gains at one point on concerns the
dollar's strength will undermine shares of large-cap technology
companies. The Nasdaq fell as much as 0.5 percent before
recovering and closing down just shy of break-even.
Oil fell for the eighth consecutive session, edging below
$70 a barrel, as the dollar pressured prices and outweighed
solid U.S. and Chinese economic data. []
The stronger dollar also sent bullion investors racing to
cut positions and squashed gold prices to a four-week low of
$1,109.10 an ounce. Worries over Spanish and Greek sovereign
debt helped boost the safe-haven appeal of the dollar and
diminished gold's allure as an inflation hedge.
Ultimately, stocks gained because of the economic reports.
Shares of Alcoa Inc <AA.N> surged 8.2 percent and were the
second-biggest contributor to the Dow after aluminum prices
rose nearly 4.0 percent to their highest since October 2008.
"Better than expected retail sales and consumer sentiment
is what a lot of people are pointing to as the turnaround,"
said Christian Cooper, a rates strategist at RBC Capital
Markets in New York.
Rick Lake, portfolio manager of the Aston/Lake Partners
LASSO Alternatives Fund in Greenwich, Connecticut, said that
"today is a repeat of prior days, with economic data showing
recession is bottoming out and recovery is here."
The Dow Jones industrial average <> closed up 65.67
points, or 0.63 percent, at 10,471.50. The Standard & Poor's
500 Index <.SPX> rose 4.06 points, or 0.37 percent, at
1,106.41. The Nasdaq Composite Index <> slipped 0.55
points, or 0.03 percent, at 2,190.31.
U.S. debt prices fell after three days of underwhelming
Treasury auctions and the spate of economic data that lifted
prospects for a sustained economic recovery. []
Yields, which move inversely to prices, broke through
technically significant barriers, spurring further selling.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 12/32 in price to yield 3.54 percent.
Oil fell.
U.S. crude for January delivery <CLc1> fell 67 cents to
settle at $69.87, matching an eight-day losing streak last seen
in October 2003. Prices slid nearly 11 percent over the span.
Brent crude futures <LC0c1> rose 2 cents to settle at
$71.88 after five straight days of losses.
U.S. February gold futures <GCG0> settled down $6.30 at
$1,119.90 an ounce on the COMEX division of the NYMEX.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.66 percent at 76.546.
The euro <EUR=> was down 0.77 percent at $1.462. against
the yen, the dollar <JPY=> was up 1.04 percent at 89.10.
A slew of data earlier the day showed China is on a brisk
path to recovery, buoyed Asian equity and commodity markets.
The MSCI index of Asia Pacific stocks outside Japan rose
0.5 percent <.MIAPJ0000PUS> and Japan's Nikkei share average
<> rose almost 2.5 percent.
(Reporting by Angela Moon, Edward McAllister, Steven C.
Johnson, Emily Flitter and Frank Tang in New York; Kirsten
Donovan, Jan Harvey, Michael Taylor in London; writing by
Herbert Lash)
