* World stocks rise at slower pace
* U.S. housing data hurts dollar, some stocks
* Emerging market stocks surge to 17-month highs
(Updates with closing prices)
By Manuela Badawy
NEW YORK, Jan 5 (Reuters) - World stocks rose at a slower
pace on Tuesday but investors remained upbeat about the global
economic recovery despite weaker-than-expected U.S. housing
data that saw the U.S. dollar lose ground against the yen.
A day after global equities touched 15-month highs on the
first day of 2010, some investors eased up on buying riskier
assets after a sharp drop in U.S. pending home sales data with
the U.S. jobs report due on Friday.
The MSCI's all-country world stock index <.MIWD00000PUS>
rose 0.27 percent to a level not seen since October 2008. The
MSCI emerging market index <.MSCIEF> rose 0.93 percent to the
highest since August 2008, before the collapse of U.S.
investment bank Lehman Brothers triggered last year's financial
crisis globally.
"The underlying trend for the short-term is still up.
Corporate confidence is very high and earnings are continuing
to be revised up. The picture now is for a more solid type of
recovery outlook," said Mike Lenhoff, strategist at Brewin
Dolphin in London.
The Dow Jones Industrial Average ended down though after a
report showed U.S. pending home sales in November dropped 16
percent after rising for nine straight months. The Nasdaq ended
flat while the S&P 500 index was slightly higher, supported by
a report showing factory orders in December rising to thehighest level since April 2006.[]
"The housing figure from the U.S. did put a bit of dampener
on everything. If that housing market gives in the U.S. then it
would be seriously bad news for the recovery," Lenhoff said.
The Dow Jones industrial average <> fell 0.11 percent,
at 10,572.02, while the Nasdaq Composite Index <> inched
up 0.01 percent, at 2,308.71 to hit its highest close in 16
months. The Standard & Poor's 500 Index <.SPX> rose 0.31
percent, at 1,136.52, a fresh 15-month closing high.
The U.S. dollar fell as the housing data dampened
expectations the U.S. Federal Reserve could raise interest
rates sooner rather than later.
The weaker housing data backed comments by Federal Reserve
Governor Elizabeth Duke on Monday that there were still strong
headwinds in the housing market and the Fed needs to keep
interest rates "exceptionally low" for an "extended period."
[]
The U.S. dollar <JPY=> fell 0.96 percent to 91.66 yen, on
track for its biggest one-day percentage loss in nearly a
month.
The euro <EUR=> was down 0.31 at $1.4367, having climbed
to around $1.4483 earlier in the day to hit its strongest since
Dec. 17.
U.S. Treasury debt prices rose as bargain hunting persisted
in the wake of recent losses, with benchmark 10-year notes
<US10YT=RR> up 16/32 in price, yielding 3.76 percent, versus
3.82 percent at Monday's close.
Last week, U.S. 10-year yields rose to 3.918 percent, their
highest since early June, after surprisingly strong weekly
jobless claims figures bolstered expectations among some that
Friday's payrolls report will show employment growth.
Any sign of jobs growth raises expectations the U.S.
Federal Reserve will begin to plan interest rate hikes -- a
move that would boost the value of dollar-based assets.
The FTSEurofirst 300 <> index of top European shares
closed down 0.1 percent after the U.S. home sales data.
Japan's Nikkei <> inched up 0.3 percent to 10,681.83,
its highest close since Oct. 3 2008.
