* Global stocks gain on surprise Abu Dhabi aid to Dubai
* Oil slips hovers at $70 a barrel on economic optimism
* Bonds steady as bargain-hunting offsets rising stocks
* Dollar dips vs euro on Dubai news; Fed meeting in focus
(Updates with U.S. markets, changes byline, dateline,
previous LONDON)
By Herbert Lash
NEW YORK, Dec 14 (Reuters) - Stocks rose globally and the
euro edged up against the U.S. dollar on Monday after Abu
Dhabi's decision to throw neighbor Dubai a $10 billion lifeline
to repay its debts boosted the appetite for riskier assets.
Gold prices rose and copper prices firmed on news that
Dubai had averted a debt default, which pressured the dollar
and boosted higher-yielding currencies such as the euro. For
details see [] and [].
Oil prices hovered at break-even after falling for eight
consecutive sessions as gains in stocks worldwide boosted
economic optimism and countered concerns about brimming
inventories. []
Abu Dhabi's move initially prompted investors to sell the
dollar and push up equities on improved risk appetite, in
contrast to last week, when strong U.S. economic data boosted
risk-taking to the benefit of the dollar. []
Stocks gained on relief that Abu Dhabi's lifeline would
help Dubai avoid default, while a takeover deal by energy giant
Exxon Mobil fed optimism about recovery in the M&A market.
Both the MSCI all-country world index <.MIWD00000PUS> and
the broad Standard & Poor's 500 Index <.SPX> climbed to hover
just below levels last seen 14 months ago.
European shares rose for a third straight session to hit a
one-week closing high, with regional financial shares advancing
after Dubai said it had received funding to help repay $4.1
billion in an Islamic bond maturing on Monday. []
U.S. stocks were also helped by a deal from Citigroup Inc
<C.N> to pay back U.S. government funds.
But lingering worry over debt woes elsewhere capped euro
gains and investors were cautious ahead of a meeting of Federal
Reserve policy-makers this week that may provide clues about
how the Fed -- the U.S. central bank -- intends to exit its
current ultra-loose monetary policy.
"Abu Dhabi helped risk-taking overnight and that hurt the
dollar but we're at an interesting point heading into the Fed
meeting," said Dan Cook, senior analyst at IG Markets in
Chicago.
"(Fed Chairman Ben) Bernanke has said rates will stay low,
but people are starting to think the Fed at some point will
have to consider raising them," Cook said.
The Dow Jones industrial average <> was up 32.27
points, or 0.31 percent, at 10,503.77. The Standard & Poor's
500 Index <.SPX> was up 7.63 points, or 0.69 percent, at
1,114.04. The Nasdaq Composite Index <> was up 19.05
points, or 0.87 percent, at 2,209.36.
In Europe, the FTSEurofirst 300 <> index of top
regional shares ended 0.8 percent higher at 1,018.29.
The inter-bank cost of borrowing dollars and euros held
near record lows as the market prepared for the Fed's statement
on interest rates and the final chance to get cheap one-year
money from the European Central Bank. []
Crude oil pared losses after Abu Dhabi bailed out Dubai.
U.S. light sweet crude oil <CLc1> fell 7 cents to $69.80 a
barrel. Brent crude <LCOc1> was up 28 cents at $72.16.
Crude's eight straight sessions of losses matched a slump
in October 2003 and is the longest such streak since a nine-day
slide in July 2001.
"I think what is driving up crude is the strong stock
market, especially with the big news from Dubai overnight,"
said Phil Flynn, analyst at PFGBest Research in Chicago.
U.S. Treasury debt prices were mostly steady as
bargain-hunting offset a drop in safe-haven bids for bonds
following Abu Dhabi's $10 billion lifeline. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
3/32 in price to yield 3.54 percent.
Most euro zone government bond prices pushed higher on
year-end buying, while Greek government bonds were hit as its
government struggled to tackle its deficit. []
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.38 percent at 76.279.
The euro <EUR=> was up 0.27 percent at $1.4661, and against
the yen, the dollar <JPY=> was down 0.63 percent at 88.49 yen.
Spot gold prices <XAU=> rose $9 to $1,123.50 an ounce.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> reversed course following the Dubai
announcement to gain 0.4 percent. In Tokyo, Nikkei average
<> erased earlier losses to end flat.
(Reporting by Angela Moon, Edward McAllister, Steven C.
Johnson, Emily Flitter and Frank Tang in New York and Kirsten
Donovan, Jan Harvey, Michael Taylor in London; Writing by
Herbert Lash; Editing by James Dalgleish)
