* Stocks rise on strong U.S. data, earnings
* U.S. economic data boosts U.S. dollar
* Risk appetite revival pressures bonds
(Updates prices, quotes, details)
By Manuela Badawy
NEW YORK, Feb 17 (Reuters) - U.S. stocks were higher and
the U.S. dollar appreciated against major currencies on
Wednesday helped by better U.S. economic data, though concern
lingered about fiscal problems in Europe.
Stocks also gained worldwide on rekindled investor risk
appetite which had taken a hit from concerns about the swollen
debt of Greece and other euro zone countries.
U.S. bonds fell as investors bought riskier assets such as
stocks which tend to perform better during times of economic
growth. Commodity prices continued their rally though at a
slower pace, as strength in the U.S. currency tends to pressure
dollar-denominated commodities.
The U.S. Commerce Department reported on Wednesday that
housing starts hit their highest in six months while Federal
Reserve data showed industrial output rose a solid 0.9 percent
in January, suggesting an economic recovery was taking a firm
hold as the year began.
The Dow Jones industrial average <> was up 29.78
points, or 0.29 percent, at 10,298.59. The Standard & Poor's
500 Index <.SPX> was up 2.79 points, or 0.25 percent, at
1,097.66. The Nasdaq Composite Index <> was up 4.07
points, or 0.18 percent, at 2,218.26.
U.S. stocks were also boosted by strong results from farm
equipment maker Deere & Co <DE.N>. For details see
[]. The results follow the upbeat trend in
fourth-quarter U.S. corporate results, with more than 70
percent of the Standard & Poor's 500 companies beating analyst
earnings estimates so far, according to Thomson Reuters data.
"Today you're getting some good earnings numbers and not
bad numbers on the economy, and that's the cyclical uptick in
the economy, but momentum is fading," said Jim Awad, managing
director at Zephyr Management in New York.
"Nothing has changed in Greece or any of the other
(affected) countries," he said. Uncertainty about the future
for debt-burdened Greece has hit the euro in recent weeks.
MSCI world equity index <.MIWD00000PUS> rose 0.77 percent,
while the pan-European FTSEurofirst 300 <> index of top
European shares hit a two-week closing high of 1.2 percent,
boosted by financials after BNP Paribas <BNPP.PA>
fourth-quarter profits beat forecasts and operational results
from ING <ING.AS> pleased investors.
In currencies, the U.S. dollar was up against major
currencies, with the ICE Futures Exchanges dollar index <.DXY>
up 0.71 percent at 80.265. The euro <EUR=> was down 1.01
percent at $1.3629 and against the Japanese yen, the dollar
<JPY=> was up 0.78 percent at 90.80.
The housing and building permit data "is a sign of future
construction and (shows) a stabilizing housing market. The
dollar is trading on that data right now and I think investors'
sentiment will shift to focus on the FOMC meeting minutes to be
released later today," said John Doyle, currency strategist at
Tempus Consulting in Washington.
The Federal Reserve will release minutes from the Jan.
26-27 Federal Open Market Committee policy meeting later in the
day.
The U.S. housing market, which is at the core of the most
painful economic downturn since the Great Depression, is
crawling out of a three-year slump, supported by government
programs. New home construction contributed to economic growth
in the third quarter of 2009 for the first time since 2005. For
more see [].
Groundbreaking for new homes increased 2.8 percent to a
seasonally adjusted annual rate of 591,000 units while new
building permits, which give a sense of future construction,
fell 4.9 percent to 621,000 units last month after rising to a
14-month high of 653,000 in December, the Commerce Department
said. That compared to analysts' forecasts for 620,000 units.
U.S. bonds were left out of favor, with the benchmark
10-year U.S. Treasury note <US10YT=RR> trading down 9/32, with
the yield at 3.6966 percent. Yet given the economy is coming
out of the worst recession in seven decades it will take more
time to convince investors that a broad-based recovery is
firmly in place.
In Europe, debt markets took a breather from the crisis
over debt-stricken Greece after Spain drew a stampede of demand
for a government bond issue and Portugal's borrowing costs fell
in signs that market fears of sovereign risk in the euro zone
may be easing, at least for now. []
In Asia, Japan's Nikkei average surged 2.7 percent on
Wednesday, chalking up its biggest daily rise in over two
months, as investors snapped up Mitsubishi Corp <8058.T> and
other resource-related stocks after a jump in commodities
prices.
(Additional reporting by Caroline Valetkevitch and Wanfeng
Zhou in New York)
