* US dollar, bonds rise on weak consumer confidence data
* BP's strong earnings lift Dow
* Volatility index rises, investors move to safer havens
(Updates with closing prices)
By Manuela Badawy
NEW YORK, Oct 27 (Reuters) - The U.S. dollar and bonds
rose on Tuesday as investors moved into safer havens after
data showed U.S. consumer confidence deteriorated in October,
reviving worries over the pace of an economic rebound.
The U.S. dollar rose to two-week highs against the euro
while bonds surged, driving yields, which move inversely to
price, down from two-month highs.
Consumer confidence in the United States soured as the
worst labor market in a quarter century increased concerns
over the likely extent of an improvement in the future.
"This report reminds us that the economic recovery will be
soggy at best unless the consumer starts to feel better and
spend more," said Cary Leahey, an economist at Decision
Economics in New York.
Consumers are the backbone of the U.S. economy, so a weak
confidence report bodes ill for the economic recovery because
it indicates restrained consumer spending.
The Conference Board's index of consumer confidence fell
to 47.7 in October, weaker than the consensus expectation of a
reading of 53.1. Confidence was pressured on growing concerns
that job market conditions would worsen in the near term.
[]
Other data showed home prices rose for the fourth-straight
month in August, but did little to boost markets throughout
the day. The Standard & Poor's/Case-Shiller composite index of
home prices in 20 metropolitan areas rose more than expected
in August. For more see [].
In late trading, the euro was down 0.54 percent at $1.4789
after touching $1.4787 <EUR=EBS>, its lowest since Oct. 13 and
way below the $1.5064 hit on Monday, which was its highest
since August 2008.
The dollar index <.DXY>, a measure of its performance
against six other major currencies, rose to 76.323, a two-week
high, well above a 14-month low of 74.94 hit last week.
U.S. Treasuries extended gains on Tuesday following the
auction of $44 billion of two-year notes, part of this week's
record $123 billion supply of government bonds.
The benchmark 10-year U.S. Treasury note <US10YT=RR> shot
up 27/32, with the yield at 3.45 percent, down from 3.55
percent late on Monday.
Euro-zone government bonds also rallied, with Bund futures
posting their biggest one-day gain in a month, on the back of
the weak U.S. consumer data that boosted demand for these
lower-risk assets.
STOCKS SEESAW
The S&P 500 and the Nasdaq fell as investors booked
profits following the stock market's recent run-up. The Dow
clung to a modest gain as shares of U.S. stocks Exxon Mobil
<XOM.N> and Chevron <CVX.N>, both set to report quarterly
results later this week, rose on the back of BP Plc's
<BP.L><BP.N> strong earnings. []
Oil prices <CLc1> ended 1.11 percent higher at $79.55 a
barrel ahead of weekly inventory reports.
"There is definitely a gathering bullishness around energy
at large, which is helping support things," said Matt Kaufler,
portfolio manager and equity analyst at Clover Capital
Management in Rochester, New York.
"If you believe the worst of the contraction is behind us,
you're going to see oil prices continuing to rise."
The Dow Jones industrial average <> closed up 14.21
points, or 0.14 percent, at 9,882.17. The Standard & Poor's
500 Index <.SPX> closed down 3.54 points, or 0.33 percent, at
1,063.41. The Nasdaq Composite Index <> closed down
25.76 points, or 1.20 percent, at 2,116.09.
The Nasdaq fell after Chinese Internet search giant
Baidu.com <BIDU.O> reported quarterly revenue that missed
expectations.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.3 percent, supported by BP's report.
Meanwhile, the Chicago Board Options Exchange Volatility
Index <.VIX>, Wall Street's favorite barometer of investor
sentiment, shot up to its highest level in four weeks,
indicating worries about future losses.
This sentiment swept over into Tuesday trading with MSCI's
all-country world stocks index <.MIWD00000PUS> down 1 percent,
its emerging market sub-index <.MSCIEF> down 2.1 percent and
Japan's Nikkei <> closing down 1.45 percent.
(Additional reporting by Ellis Mnyandu; Editing by Jan
Paschal)
