* U.S. stocks surge more than 6 percent after deep plunge
* Oil surges, bouncing off 22-month low below $55 a barrel
* Bonds fall as flight to safety evaporates on stock rally
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Nov 13 (Reuters) - U.S. stocks surged on Thursday
after hitting 5-1/2-year lows in a roller-coaster session as
investors shrugged off dismal economic news to snap up beaten
down shares and oil prices rose sharply after falling below $55
a barrel.
The three major U.S. indexes soared more than 6 percent,
led by oil and energy shares, and crude oil shot up 3.7 percent
as investors rushed to buy assets on hopes prices had finally
touched bottom.
"I'm sensing we might be nearing the bottom," said Mark
Waggoner, president of Excel Futures in Huntington Beach,
California, referring to crude prices.
Crude oil has plummeted more than $90 a barrel since
peaking at around $147 in July. It settled up $2.08 at $58.24
<CLc1> on Thursday, as OPEC seemed poised to cut production
again later this month and the rebound in equities offset
growing signs of slowing demand.
The stock rally halted a flight to safety bid in both bonds
and the dollar. In late afternoon trade the euro was up 3
percent against the dollar at $1.2836 <EUR=>, clawing back from
the two-week low of $1.2389 hit earlier in the day.
"The dollar has benefited lately from a flight-to-safety
bid generated in part by high volatility in the U.S. equity
markets. The move today was reversed," said Gareth Sylvester,
senior currency strategist at HiFX in San Francisco.
Stocks rallied off a midday plunge that sent the S&P 500
breaking below an intraday low for the year set on Oct. 10. The
Dow broke through the 8,000 mark, but still remained more than
80 points above an intraday low also set on Oct. 10.
The Dow Jones industrial average <> closed up 552.59
points, or 6.67 percent, at 8,835.25. The Standard & Poor's 500
Index <.SPX> gained 58.99 points, or 6.92 percent, at 911.29.
The Nasdaq Composite Index <> surged 97.49 points, or 6.50
percent, at 1,596.70.
Chevron <CVX.N> added the most points to the Dow's rise,
climbing 12.5 percent at $75.71, and Exxon Mobil <XOM.N> was
the second-biggest contributor, gaining 9.4 percent at $75.41.
Crude oil prices rose after earlier dropping to $54.67, the
weakest price since January 2007, following the release of U.S.
government data showing the inventory of products was rising
and demand was weakening.
The S&P energy index climbed 11.1 percent, while the S&P
financial index <.GSPE> jumped 7.2 percent
Stocks slid earlier in the session after another round of
gloomy economic data and a lowered revenue outlook from Intel
Corp <INTC.O> ,the world's largest maker of computer chips.
[]
The Organization for Economic Cooperation and Development
cut its economic output forecasts for the United States, Japan
and the euro zone, saying it sees all three falling into
recession.
Earlier in Europe, stocks declined for a fifth day in seven
sessions, posting their lowest close in two weeks.
The FTSEurofirst 300 <> index of top European shares
closed a volatile session 0.4 percent lower at 852.55 points.
[]
Shares in British lenders were among the hardest hit, amid
mounting worries that the UK economy faces tough times ahead.
Barclays <BARC.L> lost 6.3 percent and Royal Bank of Scotland
<RBS.L> 6.1 percent.
"In the short term the news flow will remain negative, with
more jobs destruction, falling consumer spending, etc. etc.,"
said Yann Lepape, an economist at Oddo Securities in Paris.
"And the gloom is on both the macro and the micro fronts, with
profit warnings on the rise."
Short-dated euro zone government bond yields fell to their
lowest level in over three years on news Germany has fallen
into recession, increasing expectations for further interest
rate cuts from the European Central Bank. []
The recession in Germany, Europe's biggest economy and the
world's top exporter of goods, bodes ill for euro-zone figures
on gross domestic product due on Friday.
"The ECB is hinting strongly that rates are going to come
down again next month. The news still remains unambiguously
negative," said Investec economist David Page.
In the United States, the government reported the number of
U.S. workers drawing jobless benefits hit a 25-year high this
month and U.S. imports suffered a record drop in September,
underscoring a rapid drop-off in the U.S. economy.
[]
U.S. gold futures ended nearly 2 percent lower in choppy
trade.
The December contract for gold <GCZ8> settled down $13.30
at $705.00 an ounce in New York.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
37/32 in price to yield 3.88 percent, while the 2-year U.S.
Treasury note <US2YT=RR> fell 5/32 in price to yield 1.25
percent.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 1.73 percent at 86.229.
Against the yen, the dollar <JPY=> rose 2.79 percent at 97.51.
Japan's Nikkei average <> dropped 5.3 percent
overnight, and Asian shares fell to their lowest this month,
with the MSCI index of the region's stocks outside Japan
<.MIAPJ0000PUS> falling 4.8 percent.
(Reporting by Ellis Mnyandu, Wanfeng Zhou and Ellen Freilich
in New York and Kirsten Donovan, Barbara Lewis and Pratima
Desai in London and Blaise Robinson in Paris; Writing by
Herbert Lash; Editing by Leslie Adler)
