* Wall Street rallies on solid profits, recovery hopes
* Oil jumps as economic data raises economic recovery hope
* Dollar slips as risk sentiment improves
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, July 30 (Reuters) - Global stocks rallied and oil
surged more than 5 percent on Thursday as solid corporate
results worldwide and encouraging economic data boosted
sentiment that had turned skittish earlier in the week.
Commodity prices jumped, with the Reuters-Jefferies CRB
index <.CRB> of 19 commodities rising 3.9 percent, its biggest
daily gain since March, after a two-day sell-off.
And Long-dated U.S. Treasury bonds rebounded as fears about
the appetite for U.S. government debt eased after robust demand
for $28 billion in new seven-year notes. ID:[]
U.S. equity gains were broad-based, with the Standard &
Poor's 500 Index <.SPX> hitting an almost nine-month intraday
high that was less than 4 points below the key 1,000 mark. The
S&P closed up 1.19 percent after rising more than 2.2 percent
earlier.
Propelled by commodities, economically sensitive sectors
such as materials were the biggest standouts. The S&P materials
sector index <.GSPM> rose 3 percent.
After roiling markets a day earlier, China soothed global
markets by reaffirming a loose monetary policy. Fears of
tighter credit had led world markets to plunge on Wednesday.
Tokyo's main stock gauge hit its highest close in nine
months, European equities closed at their highest in nearly
nine months and Britain's top share index ended close to a
seven-month high.
MSCI's all-country world index <.MIWD00000PUS> gained 1.5
percent, spurred by strong or better-than-expected corporate
results and improving data.
Corporate results around the world boosted investor
sentiment, including those of Honda Motor <7267.T> and Nissan
Motor <7201.T> in Japan, BT Group <BT.L> in Britain, and
Motorola Inc <MOT.N> and Tyco International Ltd <TYC.N> in the
United States.
The Dow Jones industrial average <> closed up 83.74
points, or 0.92 percent, at 9,154.46. The Standard & Poor's 500
Index <.SPX> rose 11.60 points, or 1.19 percent, at 986.75. The
Nasdaq Composite Index <> added 16.54 points, or 0.84
percent, at 1,984.30.
The rally is "partly due to positive earnings reports this
morning, a pick-up in commodity prices and also investors who
missed the recent advance," said Michael Sheldon, chief market
strategist at RDM Financial in Westport, Connecticut.
"The fact that any recent pullbacks have been shallow seems
to be an indication of strength, leaving investors to buy dips
rather than sell rallies."
A handful of diversified U.S. manufacturers reported
results that topped Wall Street estimates, boosting confidence
that the worst recession in decades may be ending.
[].
Still, companies including Tyco, Cummins Inc <CMI.N> and
Parker Hannifin Corp <PH.N> maintained a cautious view on the
economy.
In addition, the number of Americans collecting long-term
unemployment aid fell to the lowest level in three months in
mid-July, government data showed, implying a slowing pace of
layoffs as the economy stabilizes. []
And euro zone economic sentiment increased in July to its
highest level in eight months, signaling the economy is
bottoming out. []
The FTSEurofirst 300 <> index of top European shares
finished 2.2 percent higher at 930.62.
U.S. crude <CLc1> settled up $3.59 at $66.94, nearly
erasing a 5.8 percent loss on Wednesday after U.S. data showed
a steep build in the top consumer's crude inventories. []
London Brent <LCOc1> traded up $3.58 to $70.11 a barrel.
"Markets are rebounding with stocks higher, renewed
optimism and a weak dollar," said Tom Bentz, an analyst at BNP
Paribas Commodity Futures Inc. "Oil markets were oversold after
yesterday's sharp drop and jobless data may have also provided
additional support."
The U.S. dollar fell against major currencies as the rally
in equity and commodity markets on optimism about the economy
eroded safe-haven demand for the greenback. []
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.39 percent at 79.322.
The euro <EUR=> was up 0.21 percent at $1.4064. Against the
yen, the dollar <JPY=> was up 0.46 percent at 95.47.
U.S. Treasury debt prices were mixed.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
13/32 in price to yield 3.61 percent. The 2-year U.S. Treasury
note <US2YT=RR> was down 1/32 in price to yield 1.17 percent.
Bargain-hunting for longer-dated debt in the wake of
Treasuries' weakness before the seven-year auction also helped
revive appetite, analysts said.
U.S. gold futures <GCQ9> closed almost 1 percent higher at
$934.90 an ounce. []
The MSCI index of Asia-Pacific shares excluding Japan
<.MIAPJ0000PUS> rose nearly 1 percent, heading toward 10-month
highs after a sharp drop on Wednesday in the wake of a 5
percent sell-off in Shanghai.
Tokyo's Nikkei average <> gained 0.5 percent to hit
its highest close in nine months.
(Reporting by Ellis Mnyandu, Matthew Robinson, Wanfeng Zhou
and Chris Reese in New York, and Atul Prakash, Harpreet Bhal,
Kirsten Donovan and Rebekah Curtis in London; Writing by
Herbert Lash; Editing by Leslie Adler)
