* Stocks waver as doubts rise about U.S. stimulus plan
* Oil falls as recession fears add to worries about demand
* Dollar weakens across the board as safety bid weakens
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Feb 9 (Reuters) - U.S. stocks wavered and oil
prices slipped on Monday as concerns about weak demand and
fears that Washington's plans to heal the U.S. economy might
prove insufficient turned markets lower.
Downbeat broker comments on consumer companies and more
dismal earnings reports led the Dow lower and offset hopes that
U.S. President Barack Obama's plan to bail out the ailing U.S.
financial sector will spare shareholders.
Oil also turned lower late in the day as a weak outlook for
U.S. fuel demand outweighed expectations Congress will pass an
$800 billion economic recovery package and talk of supply cuts
by the Organization of Petroleum Exporting Countries.
"The recession argument is winning out time and time
again," said Addison Armstrong, director of market research at
Tradition Energy in Stamford, Connecticut.
"In the case of the OPEC cuts, we're starting to see them,
but they still have some ways to go," he said. "In terms of the
effect of the stimulus package, that's not something that's
going to be seen in the real economy until the late third
quarter or fourth quarter (of 2009) at the soonest."
U.S. crude for March delivery <CLc1> settled at $39.56,
down 61 cents. London Brent <LCOc1> settled at $46.02, down 19
cents.
The dollar fell as expectations Congress will approve the
stimulus plan this week helped ease risk aversion while the
benchmark S&P 500 stock index to closed slightly higher.
"One of the things that has been driving the dollar was
fear and lack of risk appetite," said Joseph Trevisani, chief
market analyst at FX Solutions in Saddle River, New Jersey.
"So if the financial bailout package gives people
confidence the financial system problems are behind us, they
will be more disposed to take foreign currency risk and that
will lead (investors) away from the dollar," Trevisani said.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> down 0.58 percent at 84.794.
Gold futures ended below $900 an ounce and world stocks as
measured by MSCI's all-country index <.MIWD00000PUS> rose
slightly on hopes for a stimulus plan.
A newly energized Obama launched a new drive to win the
stimulus plan's passage, flying to Elkhart, Indiana, to make
his case to residents of a city where the unemployment rate has
soared to 15.3 percent from 4.7 percent a year ago.
Obama also was due to hold his first White House news
conference in the evening.
Focus on the stimulus package led the administration to
postpone Treasury Secretary Timothy Geithner's much-awaited
announcement of a bank rescue plan until Tuesday. However,
analysts said it's unclear how much it will boost stocks.
"Everyone's waiting for Geithner tomorrow," said Steven
Masocca, managing director at Wedbush Morgan in San Francisco.
"Expectations are raised or as high as they can be -- it may be
a bit anti-climatic because a lot of the details have already
leaked out."
Shares of leading soft drink makers Coca-Cola <KO.N> and
Pepsi Co <PEP.N> fell after broker downgrades by Goldman Sachs
and Citigroup on each company's respective price target.
Coca-Cola, a Dow component, dropped 2.9 percent, while
PepsiCo slid 3.9 percent.
The Dow Jones industrial average <> closed down 9.72
points, or 0.12 percent, at 8,270.87. The Standard & Poor's 500
Index <.SPX> rose 1.29 points, or 0.15 percent, at 869.89. The
Nasdaq Composite Index <> fell 0.15 points, or 0.01
percent, at 1,591.56.
Earlier, European shares rose for the fourth session in
five, wiping out almost all year-to-date losses in an index of
top regional shares.
In Europe a rise in bank stocks was supported by
better-than-expected results at Barclays <BARC.L>, which rose
10.9 percent after posting a 6.1 billion pound ($9 billion)
profit and saying credit market losses were waning.
U.S. banks also rose, with the the S&P financial index
<.GSPF> up 1.3 percent. But the ability of the sector as a
whole to impact the market has been greatly diminished because
flagging stock prices of financial companies have cut their
market caps, reducing their weight on the overall market.
The benchmark 10-year U.S. Treasury note <US10YT=RR>, which
earlier had been lower, rose 1/32 in price yield 2.99 percent.
The 2-year U.S. Treasury note <US2YT=RR> fell 2/32 in price to
yield 1.02 percent.
The euro <EUR=> rose 0.68 percent at $1.3019 and against
the yen, the dollar <JPY=> fell 0.57 percent at 91.46.
Spot gold prices <XAU=> fell $16 to $894.55 an ounce.
(Reporting by Ellis Mnyandu, Gertrude Chavez-Dreyfuss, Chris
Reese and Rebekah Kebede in New York; and Brian Gorman, Naomi
Tajitsu and Ian Chua in London; writing by Herbert Lash;
Editing by Kenneth Barry)
