* U.S. shares eke out gain, break four-day losing streak
* World stocks decline for fifth straight day
* Yen pulls back from 15-year highs on intervention talk
(Recasts; updates with close of U.S. markets)
By Walden Siew
NEW YORK, Aug 25 (Reuters) - U.S. stocks staged a comeback
on bargain hunting after suffering steep early losses on
disappointing economic data on Wednesday, while the yen pulled
back from a 15-year high on mounting speculation Japanese
authorities may intervene to stem the currency's rise.
Wall Street reeled in early trade after the government
reported that sales of new U.S. single-family homes fell in
July to their lowest level in 47 years and orders of
long-lasting manufacturing goods posted their biggest decline
in July in 1-1/2 years had driven.
The data, the latest evidence that the U.S. economic
recovery is stalling, stoked fears of a double-dip recession
and drove down world stocks for a fifth straight day.
Positive momentum grew on Wall Street, however, after the
benchmark S&P 500 index, which had sagged as much as 1 percent
earlier, bounced back from a breach of the 1,040 level, which
is considered a key technical support. All three major indexes
rose, breaking a four-day losing streak.
But without underlying support from economic fundamentals,
there was little confidence that Wall Street could sustain
gains.
"Overall, this is still a very careful market," said Quincy
Krosby, market strategist at Prudential Financial in Newark,
New Jersey. "Until we see a package of decidedly positive data,
this market is going to be vulnerable."
Gold rose to an eight-week high as investors sought to
traditional safe havens. U.S. Treasuries, which had gained
earlier on fears about the economy's path, came under selling
pressure as U.S. equities' turned around.
The Dow Jones industrial average <> was up 19.61
points, or 0.20 percent, at 10,060.06. The Standard & Poor's
500 Index <.SPX> was up 3.46 points, or 0.33 percent, at
1,055.33. The Nasdaq Composite Index <> was up 17.78
points, or 0.84 percent, at 2,141.54.
World equities measured by the MSCI All-Country World Index
<.MIWD00000PUS> dropped 0.57 percent, down for a fifth straight
session, and the Thomson Reuters euro zone peripheral index
<.TRXFLDPIPU> lost 0.29 percent.
In Europe shares declined to a five-week closing low after
the Commerce Department reported that sales of U.S. new
single-family homes were at the lowest since records began in
1963. And prices fell to the lowest level in more than 6-1/2
years, implying further loss of momentum in the economic
recovery. For full story, see []
The data on new-home sales comes a day after a report that
showed sales of existing homes dropped by a record rate to a
15-year low.
In addition, Standard & Poor's downgraded Ireland's credit
rating, sending a sharp reminder that euro zone economies still
face problems managing their debt.
S&P's one-notch cut in Ireland's rating overshadowed a
better-than-expected German business morale reading for August
from the Ifo think-tank.
"The Ireland downgrade was not too much of a surprise but
it is still weighing on sentiment," said Raymond at City
Index.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.8 percent lower at 1,011.35 points.
Miners were among the biggest fallers. BHP Billiton <BLT.L>
fell 2 percent after it said it was cautious on the short-term
outlook and that the economy in China, its biggest customer,
would slow from recent highs.
Shares of Allied Irish Banks <ALBK.I> fell 2.9 percent,
following the S&P ratings downgrade on Ireland. S&P cited high
costs faced by the government to support ailing financial
institutions..
YEN SELLING
The yen pulled back from 15-year highs against the U.S.
dollar on Wednesday on mounting speculation that Japanese
authorities may intervene to stem the currency's rise for the
first time since March 2004.
Japan has not been immune to the deep global recession, and
a strong yen will dampen demand for Japanese exports,
offsetting other measures to stimulate the economy.
Japan's Nikkei business daily reported that Japan's
Ministry of Finance may intervene on its own to sell yen if
speculators drive up the currency. The dollar has lost nearly 9
percent against the yen this year.
Finance Minister Yoshihiko Noda told reporters that recent
yen moves were one-sided and Tokyo will respond appropriately
when necessary.
In late afternoon trading in New York, the dollar was up
0.8 percent on the day to 84.63 yen <JPY=>, though still within
reach of the 15-year low touched on Tuesday, according to
Reuters data.
Overall, the dollar was up against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
up 0.10 percent at 83.226 from a previous session close of
83.146. The euro <EUR=> was up 0.25 percent at $1.2655 from a
previous session close of $1.2624.
Tokyo's Nikkei average lost 1.7 percent to hit a 16-month
closing low on disappointment over the lack of policy action by
the authorities to rein in the strong yen.
In the U.S. Treasuries market, the benchmark 10-year U.S.
Treasury note <US10YT=RR> was down 12/32, with the yield at
2.54 percent.
The 2-year U.S. Treasury note <US2YT=RR> was down 2/32,
with the yield at 0.52 percent. At the longer end of the yield
curve, the 30-year U.S. Treasury bond <US30YT=RR> was down
4/32, with the yield at 3.57 percent.
Crude oil prices edged up from a seven-week low and settled
higher than $72. U.S. light sweet crude oil <CLc1> rose $1.27,
or 1.77 percent, to $72.90 per barrel, while spot gold prices
<XAU=> rose $10.55, or 0.86 percent, to $1239.80.
But the Reuters/Jefferies CRB Index <.CRB> was down 0.66
points, or 0.25 percent, at 261.80.
(Additional reporting by Jennifer Ablan in New York and Kevin
Plumberg in Hong Kong, Neal Armstrong, Dominic Lau and Ian Chua
in London, Editing by Leslie Adler)
