* US bonds recover from sharp sell-off earlier in the week
* US stocks give up gains on jobless claims data
* Fitch downgrades Ireland, further pressuring the euro
(Updates with European markets close)
By Walter Brandimarte
NEW YORK, Dec 9 (Reuters) - U.S. government bond prices
recovered on Thursday from a sharp sell-off earlier in the
week, supporting equity markets, but the euro fell on renewed
concerns about the euro-zone debt crisis.
Bargain-hunters bought Treasuries again after the 10-year
note's yield reached a six-month high of 3.33 percent on
Wednesday. Their move dismissed fears that investors had lost
confidence in U.S. government debt.
"The world didn't come to an end for the bond market,"
said John Donaldson, director of fixed income at Haverford
Investments at Radnor, Pennsylvania.
Other strategists anticipate Treasuries will rally into
year-end. The benchmark 10-year note <US10YT=RR> rose 10/32 in
price, with the yield at 3.232 percent.
The vote of confidence in U.S. government debt took some
pressure off equity markets.
Stocks were also supported by encouraging U.S. jobless
claims data, but resistance from Democratic leaders to the
extension of Bush-era tax cuts weighed on the market.
[]
The plan to extend tax cuts for two years, agreed to by
President Barack Obama and Republican leaders, will not be
taken up for a vote in the U.S. House of Representatives in
its current form, according to an aide for House Speaker Nancy
Pelosi. []
Major U.S. stock indexes traded flat to lower in early
afternoon, after opening modestly higher.
The Dow Jones industrial average <> slid 30.80 points,
or 0.27 percent, to 11,341.68. But the Standard & Poor's 500
Index <.SPX> edged up just 0.66 of a point, or 0.05 percent,
to 1,228.94, staying slightly above the technical resistance
level of 1,228. The Nasdaq Composite Index <> inched up
only 2.08 points, or 0.08 percent, to 2,611.24.
In Europe, the FTSEurofirst 300 <> index closed
higher for the fourth consecutive session. The pan-European
index rose 0.38 percent to 1,123.75 points after earlier
touching 1,127.67, its highest since September 2008.
"People are focusing on the growth prospects for next
year," said Richard Jeffrey, chief investment officer at
Cazenove Capital Management.
MSCI's All-Country World Index <.MIWD00000PUS> advanced
0.25 percent, even as its emerging market index <.MSCIEF> was
practically flat.
EURO-ZONE WORRIES
The euro fell after Ireland's center-left opposition
Labour party said it will vote against an 85-billion-euro
IMF/EU bailout package when it is put before parliament for
approval next week.
"Word the Irish Labour Party will vote against the bailout
sent us down here to test the lows. Some longs are dumping
euros here," said Brian Dolan, chief strategist at Forex.com
in Bedminster, New Jersey.
The European single currency was hurt by Fitch's decision
to slash Ireland's credit rating by three notches to BBB-plus.
[]
The euro <EUR=> tumbled to session lows around $1.3169 and
then recouped some of that loss to $1.3215, down about 0.31
percent for the day.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> gaining 0.18 percent.
The greenback's strength kept a lid on oil prices, as it
made the commodity more expensive for non-U.S. investors. U.S.
crude oil <CLc1> was up 11 cents, or 0.12 percent, at $88.39 a
barrel, after earlier trading in negative territory and
falling below $88.
Spot gold <XAU=> rose 0.48 percent in its choppiest
session of the past two weeks, to $1,388.30 an ounce, as
investors weighed the outlook for U.S. economic growth.
(Reporting and writing by Walter Brandimarte; Additional
reporting by Richard Leong, Leah Schnurr and Steven C.
Johnson; Editing by Jan Paschal)
