* Dow, S&P 500 eke out gains but Nasdaq slides on Microsoft
* Oil rises above $68 a barrel on demand recovery hopes
* Dollar slips vs euro as positive European data weighs
* Bonds little changed, stocks offset supply worry
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, July 24 (Reuters) - World stocks edged higher on
Friday to 2009 highs and crude oil rebounded as investors
shrugged off weak results from Microsoft to bid up drugmakers
and energy shares on growing signs of economic recovery.
The dollar fell against the euro as figures showing a
stabilizing euro zone economy and a good week for the U.S.
stock market eroded demand for the greenback as a safe haven.
<For related news click []>.
The rise in risk appetite on hopes that a global recession
is bottoming out led oil prices to rebound and top $68 a
barrel. Analysts and traders hope a turnaround in the global
economy will lift battered fuel demand. []
Solid corporate earnings and a slew of recent data boosted
optimism about the economy and gave new life to a months-long
rally in U.S. stocks that lifted the Dow <> above the 9,000
mark this week for the first time since early January.
"Overall, this was a very good week for sentiment," said
Ronald Simpson, managing director of global currency analysis
at Action Economics in Tampa, Florida.
The Dow and broader S&P 500 initially fell after Thursday's
late news showing weak results from Microsoft Corp <MSFT.O> and
American Express <AXP.N>. That gave investors pause about
global stocks that had risen more than 6 percent this week.
The Nasdaq snapped a 12-day string of gains, its longest
run since 1992, to end 0.4 percent lower.
The MSCI world equity index <.MIWD00000PUS> is up about 14
percent this year, and despite declines in a leading index of
European stocks and a slide in the Nasdaq, closed slightly
above break-even on Friday.
Copper hit a nine-month high before settling 20 cents a
pound lower and aluminum rose to eight-month highs in signs of
strong investor confidence in an economic recovery.
"The strength of the rally is derived mainly from the idea
that as we enter the end of this year and early next year,
further economic gains will kick demand back in," said Gene
McGillian, an analyst for Tradition Energy in Stamford,
Connecticut.
The Dow Jones industrial average <> rose 23.95 points,
or 0.26 percent, to 9,093.24. The Standard & Poor's 500 Index
<.SPX> advanced 2.97 points, or 0.30 percent, to 979.26. But
the Nasdaq Composite Index <> shed 7.64 points, or 0.39
percent, to 1,965.96.
U.S. crude <CLc1> settled up 89 cents at $68.05 a barrel,
the highest settlement since July 1. The gains extended a rally
that has pushed prices up more than 14 percent since July 14.
London Brent crude <LCOc1> rose $1.07 to settle at $70.32 a
barrel, after topping $70 a barrel for the first time since
July 1 earlier.
Gold futures for August delivery <GCQ9> settled down $1.70
at $953.10 but held above $950 an ounce.
"The dollar's weakness and the idea that inflation
expectations are on the rise are holding gold here," said
Andrey Kryuchenkov, an analyst at VTB Capital.
U.S. Treasury prices were little changed as a choppy stock
market revived some safety bids for bonds and offset worries
over next week's record $115 billion supply of longer-dated
debt.
The benchmark 10-year note <US10YT=RR> was unchanged in
price to yield 3.67 percent, while two-year notes <US2YT=RR>
were flat to yield 1.01 percent and the 30-year long bond
<US30YT=RR> was up 1/32 in price to yield 4.55 percent.
In late trading in New York, the euro <EUR=> rose 0.4
percent to $1.4211.
The euro got a lift after the Ifo German business sentiment
index rose for a fourth month running to its highest since
October, while initial estimates showed the euro zone services
and manufacturing sectors contracted much less sharply than
expected in July. [][].
The dollar fell 0.3 percent against the yen to 94.70
<JPY=>. The ICE Futures' dollar index <.DXY>, which tracks the
greenback versus a basket of six other major currencies, was
little changed at 78.760.
In Europe, the FTSEurofirst 300 <> index of top
regional shares ended 0.1 percent lower at 907.39.
But the FTSE 100 <> index in London ended up 0.4
percent at 4,576.61, its highest close since Jan. 7. The index
has risen almost 11 percent in the past two weeks.
Asian stocks hit a 10-month peak, with the MSCI benchmark
for Asia outside Japan <.MIAPJ0000PUS> up 0.6 percent. Japan's
Nikkei average <> rose 1.6 percent and closed higher for
an eighth straight day of gains.
(Reporting by Ellis Mnyandu, Matthew Robinson, Wanfeng Zhou,
Burton Frierson in New York; Joanne Frearson, George Matlock,
Harpreet Bhal, Rebekah Curtis and Michael Taylor in London;
writing by Herbert Lash; Editing by Kenneth Barry)
