* Global stocks jump as U.S. data underpins recovery hopes
* Oil edges to near $72 a barrel as U.S. stockpiles fall
* U.S. dollar slips to 1-year low against currency basket
* Strong economic data kicks government bond prices lower
(Updates with U.S. markets, changes byline, dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Sept 16 (Reuters) - Global stock and commodity
prices jumped while the U.S. dollar slumped to a one-year low
on Wednesday as fresh evidence of economic recovery boosted
investors' appetite for risk.
Most prices for U.S. and euro zone government debt fell
after the second day of surprisingly strong U.S. economic data
fueled expectations of a robust recovery from the worst global
downturn since World War Two. For details see [].
Oil rose toward $72 a barrel after data showed U.S. crude
stockpiles fell more than expected last week, but higher
inventories of gasoline and winter fuel capped gains.
[]
U.S. gold futures soared to highs last seen in July 2008
and copper climbed more than 3 percent, helped by the sinking
dollar and strong U.S. economic news.
The main FTSEurofirst 300 index closing above the 1,000
mark for the first time in more than 11 months, and the euro
rallied to a one-year high against the dollar, an extension of
the negative sentiment toward the U.S. currency.
"The consensus is clearly bullish, it's difficult to find
anyone bearish any more which is a danger sign," said Jesper
Dannesboe, senior commodity strategist at Societe Generale.
An increase in U.S. industrial output and a pickup in
mergers and acquisitions activity added to a view that the
economy is on the road to recovery.
U.S. and European stocks rose more than 1 percent, as did
equity markets in Asia, where stocks rose on Tuesday's U.S.
retail sales report and remarks by Federal Reserve Chairman Ben
Bernanke that the U.S. recession was probably over.
U.S. industrial production rose for a second consecutive
month in August, while higher gasoline costs pushed up U.S.
consumer prices last month. Economists said the risk of
inflation in the United States remained low. []
"This is a shot in the arm for recovery. This is what we're
looking for," Jack Ablin, chief investment officer at Harris
Private Bank in Chicago, said about industrial production.
"We're looking for solid evidence -- not just stimulus --
the economy is recovering and this is really the first piece
of evidence that needs to fall into place."
Shortly after 1 p.m. (1700 GMT), the Dow Jones industrial
average <> was up 76.55 points, or 0.79 percent, at
9,759.96. The Standard & Poor's 500 Index <.SPX> was up 11.71
points, or 1.11 percent, at 1,064.34. The Nasdaq Composite
Index <> was up 20.23 points, or 0.96 percent, at
2,122.87.
The FTSEurofirst 300 index <>, led by heavyweight
banks and commodity stocks, closed up 1.39 percent at 1,006.15,
rising for the eighth session out of the past nine.
Commodity stocks, a beneficiary of economic recovery, were
in favor. Oil major BP <BP.L> added 0.7 percent, while miner
BHP Billiton <BLT.L> advanced 3.2 percent.
"The real question is what happens when we pull away
stimulus, which we will at some point. Short term, we could
still see strong momentum in the equity market," said Michala
Marcussen, head of strategy and economic research at Societe
Generale Asset Management.
The dollar fell as its attractiveness as a safe haven has
diminished as the view on the global economy improved. That has
helped bolster most higher yielding currencies.
The ICE Futures U.S. dollar index, which tracks the
greenback versus a basket of six other major currencies, slid
to a fresh low of almost one year at 76.151 <.DXY>.
The economic data cast some doubt on a widely held view
that the Fed would be able to keep interest rates low for a
long time as the economy recovers.
"These are all signs of the economy turning around. This
takes away pressure to keep rates low," said James Caron, head
of global rates research at Morgan Stanley in New York.
Two-year notes <US2YT=RR>, which respond to changing views
on Fed monetary policy, were down 2/32 in price to yield 0.97
percent. Five-year notes <US5YT=RR> fell 3/32 to yield 2.42
percent.
U.S. crude <CLc1> was 85 cents higher at $71.78 a barrel.
The December gold contract <GCZ9> firmed $11.20 to
$1,017.50 an ounce in New York.
Most major Asian equity markets gained 1 percent or more
after Tuesday's U.S. retail sales report. The MSCI index of
Asia-Pacific shares <.MIAPJ0000PUS> excluding Japan rose 2.6
percent to its highest this year.
Japan's benchmark Nikkei <> rose 0.5 percent.
(Reporting by Edward Krudy, Nick Olivari and Burton Frierson
in New York and Chris Baldwin, Jessica Mortimer and Dominic Lau
in London; Writing by Herbert Lash; Editing by James
Dalgleish)
