* US dollar rebounds, euro hit by weak economic data
* Oil slips below $72 a barrel as dollar rises
* U.S. debt rallies after $65 bln in bonds sold this week
* Global stocks steady after week's rally
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, June 12 (Reuters) - The U.S. dollar recovered
some of Thursday's losses on Friday, pressuring oil and other
commodity prices, while government bond yields eased.
U.S. and euro zone government debt rose in a relief rally
after investors this week bought $65 billion of U.S. Treasury
debt with relative ease this week, while weak eurozone economic
data on Friday supported European debt prices.
Chinese industrial output data reported on Friday was
encouraging for global economic prospects, but eurozone output
data reminded investors that the recovery still has hurdles to
overcome.
Investors had bet on an end to recession for most the week,
spurring stock and commodity prices, before some profit taking
on Friday.
"We're seeing a classic correction," said Brown Brothers
Harriman currency strategist Meg Browne. "The top performers on
the week are the worst performers today, suggesting the move is
largely corrective in nature and will not be sustained."
Oil fell below $72 a barrel on Friday, a day after reaching
a near eight-month high this week, while gold slid to a
three-week low below $940 an ounce as the U.S. dollar
rebounded. Industrial metals also pulled back from this week's
eight-month highs.
Copper, used in construction, has gained more than 70
percent this year and about 10 percent in June on stronger
economic data and hopes of increasing demand in the future.
The Reuters-Jefferies CRB index <.CRB>, which tracks the
price of futures contracts of raw materials across 19 mostly
U.S. traded markets, was down 1.09 percent.
"Most commodity markets are still quite overbought and
could be subject to a modest sell-off next week," said Edward
Meir, analyst at MF Global. "We are getting to a stage where
the steep run-up in prices has arguably over discounted the
modest brightening we are seeing in the U.S. macro picture."
Disappointing results from National Semiconductor Corp
<NSM.N> pulled technology shares lower, but a rise in defensive
stocks cushioned losses in the Dow and S&P 500 stock indexes.
"Stocks are trading on what the underlying commodities are
doing, so it stands to reason that energy and materials stocks
would sell off a little bit," said Michael Koskuba, a portfolio
manager and analyst at Victory Capital Management in New York.
Koskuba said investors were rotating their stock selection.
Merck & Co Inc <MRK.N> rose 2.9 percent and Pfizer Inc
<PFE.N> gained 1.9 percent as investors rotated money out
recent winners, including healthcare, energy and technology.
At 1 p.m. (1700 GMT), the Dow Jones industrial average
<> was down 6.28 points, or 0.07 percent, at 8,764.64. The
Standard & Poor's 500 Index <.SPX> was down 4.11 points, or
0.43 percent, at 940.78. The Nasdaq Composite Index <> was
down 20.21 points, or 1.09 percent, at 1,842.16.
European shares snapped three days of gains as softer
commodity prices weighed on energy and mining stocks. Demand
for defensive stocks like pharmaceuticals offered support.
The FTSEurofirst 300 <> index of top European
companies closed down 0.2 percent at 885.75 points, after
closing at its highest level in five months on Thursday. For
the week, the indes gained 1.5 percent.
U.S. Treasury debt rose. The benchmark 10-year U.S. note
<US10YT=RR> was up 25/32 in price to yield 3.76 percent. The
2-year U.S. Treasury note <US2YT=RR> gained 4/32 in price to
yield 1.26 percent.
The U.S. dollar rose against a basket of major currencies,
with the Dollar Index <.DXY> up 0.64 percent at 80.071.
The euro <EUR=> fell 0.60 percent at $1.402, and against
the yen, the dollar <JPY=> was up 0.70 percent at 98.23.
U.S. light sweet crude oil <CLc1> fell 74 cents to $71.94 a
barrel.
Spot gold prices <XAU=> shed $14.30 to $939.70 an ounce.
Gains in Chinese industrial output and rising U.S. retail
sales lifted Asian shares overnight toward new highs for the
year. The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 0.2 percent and Japan's Nikkei average
<> rose 1.6 percent to highs last seen in October.
(Reporting by Edward Krudy, Ellen Freilich, Steven C. Johnson
in New York; Alex Lawler, Kylie MacLellan, Jan Harvey, Michael
Taylor and Pratima Desai; writing by Herbert Lash)
