* World stocks up on economic hopes, recovery from lows
* Euro rises for 5th straight session
* U.S. Treasuries, gold fall as risk appetite picks up
(Updates to U.S. markets, changes byline, dateline, previous
LONDON)
By Manuela Badawy and Jeremy Gaunt
NEW YORK/LONDON, June 14 (Reuters) - World stocks rose more
than 1 percent on Monday to their highest in over a week and
the euro firmed from recent four-year lows as investors' risk
tolerance rose and euro zone industrial output data surged.
Safe-haven U.S. Treasuries and gold prices eased as
appetite for risky assets picked up, while oil rose more than 2
percent lifted by global risk appetite as optimism about
economic recovery improved.
A tentative equity rally since late May has lifted world
stocks by around 6 percent from their lows. The index
<.MIWD00000PUS> was up 1.2 percent.
Similarly, MSCI's main emerging market stock index
<.MSCIEF> has gained more than 9 percent since hitting a year
low on May 25. It was up 1.6 percent Monday.
While markets were spooked a week back by U.S. data showing
weak growth in private sector job creation, strong economic
data from China has reinforced a belief that the world recovery
is indeed gaining traction.
U.S. stocks were in positive territory boosted by
technology and industrial shares as European industrial
production in April surged year-on-year more than in any month
in almost two decades. For more see [].
The Dow Jones industrial average <> was up 56.68
points, or 0.56 percent, at 10,267.75. The Standard & Poor's
500 Index <.SPX> was up 6.89 points, or 0.63 percent, at
1,098.49. The Nasdaq Composite Index <> was up 22.80
points, or 1.02 percent, at 2,266.40.
"Consumer sentiment is better (and) we're just a few weeks
away from the Q2 reporting season, for which the indications
are very healthy for the market," said Christian Stocker,
strategist at UniCredit Global Research, in Munich. "We have
more positive than negative news, and there is a lot of short
covering."
Part of the current rally is due to this year's sell-off --
world stocks are down 6 percent year to date and 8.2 percent
for the second quarter -- but it is also the result of a belief
among many investors that the underlying economic backdrop is
relatively positive and that will support corporate earnings.
David Buik, senior partner at BGC partners in London, said
the wave of risk aversion in May had left shares a bit
"oversold."
"Second quarter earnings will be somewhat better than
people expect and there may be just a little bit of mileage
left in the current rally," Buik said.
The pan-European FTSEurofirst 300 <> was up 0.9
percent to a four-week high after strong euro zone industrial
output rekindled optimism over the bloc's economic outlook.
The rally was driven by banking, mining and commodity
stocks, all of which tend to gain when economic sentiment is on
the plus side.
A slight easing in worries over the euro zone crisis helped
the banking sector, with leading banks Barclays, HSBC, Societe
Generale and Deutsche Bank rising 0.9 to 2.6 percent.
Earlier, Japan's Nikkei stock index <> closed up 1.8
percent, driven higher by exporters, again a group with a high
correlation to economic growth.
"What is helping the market is the notion that a double dip
recession is not a big risk," said Bernard McAlinden,
investment strategist at NCB Stockbrokers in Dublin. "I think
that is what the markets are latching onto."
EURO RISE
The euro rose broadly as gains in global stock markets
lifted risk appetite and prompted traders to pare back bets
against the euro zone single currency. The euro moved further
away from a recent four-year low to trade above $1.2250 <EUR=>
-- its highest in more than a week.
The euro has risen more than 2.4 percent over the past five
trading sessions but is still down around 15 percent year to
date.
Overall, however, negative sentiment about the euro,
prompted by fears about euro zone debt and the economic cost of
cutting it, remained, with analysts ascribing the streak of
gains to the market's pro-risk mood.
U.S. Treasuries and gold prices eased as improving appetite
for assets seen as higher risk, such as equities and the euro,
led to receding interest in U.S. government bonds and the
precious metal as a safe haven.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 19/32 in price, with the yield at 3.31 percent. The 2-year
U.S. Treasury note <US2YT=RR> was down 1/32, yielding 0.76
percent. The 30-year U.S. Treasury bond <US30YT=RR> was down
1-7/32 to yield 4.23 percent.
Crude oil <CLc1> rose $1.91, or 2.59 percent, to $75.69 per
barrel, while spot gold <XAU=> fell $2.05, or 0.17 percent, to
$1223.80 an ounce.
(Additional reporting by Wanfeng Zhou in New York and Brian
Gorman in London; Editing by James Dalgleish)
