* Brent crude back over $100, record premium to US oil
* Dollar gains against yen, but slumps against euro
* Bond prices pare gains as traders prepare for auction
* Stocks slip after run-up this year in equity markets
(Adds opening of U.S. markets; changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Feb 9 (Reuters) - Global stocks slipped and bond
yields rose on Wednesday as investors, seeking direction,
weighed the year's quick run-up in equity prices against the
safety of government debt, now offering a 3.7 percent return.
U.S. oil prices pared gains and gold held close to the
previous session's near-three-week high, supported by an
increased focus on inflation after China's second interest rate
hike in six weeks and interest in the metal as a haven. For
details see: []
Other asset prices also traded near flat, as investors
weighed a surge in equity prices that have lifted global stocks
more than 4 percent so far this year and the S&P 500, a U.S.
benchmark, more than 5 percent since the beginning of 2011.
The dollar gained slightly against the yen, supported by
the rise in Treasury yields and the suggestion of an improving
economic outlook. But it came under pressure in Europe as
central banks sold greenbacks to buy euros and diversify.
[]
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.18 percent at 77.858.
The euro <EUR=> was up 0.48 percent at $1.3698, and against
the Japanese yen, the dollar <JPY=> was up 0.24 percent at
82.52.
Government debt was higher but pared gains after Federal
Reserve Chairman Ben Bernanke told Congress that U.S.
unemployment remains too high despite increasing signs of
economic strength. []
At one point bond prices turned negative, as Bernanke's
testimony suggested the U.S. central bank would push on with
its $600 billion stimulus program.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
5/32 in price to yield 3.7172 percent.
Ten-year Treasury note yields earlier hit nine-month highs
before a $24 billion auction of notes later on Wednesday.
Higher yields make bonds a more attractive investment and can
crimp the appeal of equities as they translate into costlier
funding for corporations.
"Earnings are fine, the economy continues to show signs of
life but we do have this interest rate headwind (and) Treasury
yields moving higher that the U.S. equity market can't continue
to ignore," said Peter Boockvar, equity strategist at Miller
Tabak & Co in New York.
The Dow Jones industrial average <> slipped 6.51
points, or 0.05 percent, at 12,226.64. The Standard & Poor's
500 Index <.SPX> lost 4.54 points, or 0.34 percent, at
1,320.03. The Nasdaq Composite Index <> fell 8.24 points,
or 0.29 percent, to 2,788.81.
European shares edged lower from 29-month highs earlier
this week, with a number of big stocks trading ex-dividend
offsetting a wave of upbeat earnings news. []
The pan-European FTSEurofirst 300 <> index of top
shares was down 0.2 percent at 1,173.73 points
Brent crude oil climbed back over $100 a barrel after data
on Tuesday showed a drop in U.S. stockpiles. It was also
supported by the unrest in Egypt. []
But a report on Wednesday from the U.S. Energy Information
Administration showed U.S. gasoline inventories jumped almost 5
million barrels last week to the highest level in more than 20
years.
U.S. light sweet crude oil <CLc1> rose 4 cents to $86.98 a
barrel.
(Reporting by Gertrude Chavez-Dreyfuss, Richard Leong in New
York; Ikuko Kurahone, Harro ten Wolde and Josie Cox in London;
Writing by Herbert Lash; Editing by Dan Grebler)
