* Global stocks rise on hope of better economic conditions
* Dollar slips as China renews new reserve currency talk
* Crude prices fall on build in U.S. gasoline inventories
* Longer-dated bonds dip as stocks erode safety bid
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, July 1 (Reuters) - Upbeat U.S., Chinese and
European manufacturing data on Wednesday helped boost global
stocks and commodity prices, except for oil, while safe-haven
assets like the U.S. dollar and government bonds fell.
The dollar extended declines after a report said China has
asked to debate proposals for a new global reserve currency at
next week's Group of Eight summit in Italy, G8 sources said.
<For related news click []>.
At the start of a new quarter, bond traders focused on a
deluge of pending government debt supply. Euro zone debt prices
fell after a disappointing German bond sale.
Interest rates that banks charge each other for dollars,
euros and sterling marked record lows as investors await the
European Central Bank's policy meeting on Thursday. The ECB is
widely expected to keep rates on hold at a lifetime lows.
Investors are keen to learn about follow-up measures the
ECB may take after a record injection of 442 billion euros of
one-year funds last week as part of stepped-up efforts to
bolster confidence and revive interbank lending.
Manufacturing data from key global economies pointed to
improving economic conditions and helped lift, along with a
weaker dollar, natural resource and energy stocks.
Copper rose 3.6 percent, aluminum added 2.6 percent and
nickel jumped 7 percent.
U.S manufacturing shrank in June but at a slower pace than
in May, according to the Institute for Supply Management.
Similar surveys in Europe also showed manufacturing contracting
less than initially thought, while China's output grew
modestly.
Shares of Exxon Mobil Corp <XOM.N> rose 1.8 percent and
Chevron Corp <CVX.N> gained 0.8 percent.
Freeport-McMoRan Copper & Gold Inc <FCX.N> climbed 3.8
percent and Alcoa Inc <AA.N> rose 1 percent.
"Resource stocks are a good barometer of global economic
sentiment and today the miners and energy firms are the
standout performers," said David Evans, an analyst at
BetOnMarkets.com.
The Dow Jones industrial average <> added 100.82
points, or 1.19 percent, to 8,547.82. The Standard & Poor's 500
Index <.SPX> gained 9.56 points, or 1.04 percent, to 928.88.
The Nasdaq Composite Index <> rose 21.75 points, or 1.19
percent, to 1,856.79.
The FTSEurofirst 300 <> index of top European shares
closed 1.8 percent higher at 865.66 points.
The dollar fell to a three-week low against the euro. A
slowing in the deterioration in the euro zone's manufacturing
economy for the fourth straight month indicated the bloc will
contract by much less in the second quarter.
The euro <EUR=> was up 0.9 percent on the day at $1.4167,
after earlier trading as high as $1.4201 in the wake of the
China news.
The ICE Futures' dollar index <.DXY>, a measure of the
greenback's value against a basket of six major currencies,
fell 0.8 percent to 79.483.
Benchmark 10-year Treasury notes <US10YT=RR> traded 4/32
lower in price to yield 3.55 percent.
The front end of the Treasury curve traded higher after
comments late on Tuesday from San Francisco Fed Bank President
Janet Yellen who said the fed funds rate could stay pat for
"the next couple of years."
The two-year note <US2YT=RR> traded 3/32 higher in price to
yield 1.07 percent.
Copper jumped to two-week highs and other industrial metals
also surged, with lead hitting a two-week peak of $1,760 a
tonne and nickel touching $16,600, its highest since October.
Oil reversed earlier gains to fall below $70 a barrel after
government data showed increases in U.S. fuel inventories.
U.S. crude futures <CLc1> fell 1.8 percent below $68 a
barrel.
Asian stock markets were mixed. The broad MSCI index of
Asia-Pacific shares excluding Japan <.MIAPJ0000PUS> edged down
0.2 percent. Tokyo's Nikkei share average <> fluctuated
heavily before closing 0.2 percent lower.
(Reporting by Edward Krudy, Vivianne Rodrigues and Chris Reese
in New York; Maytaal Angel, Emelia Sithole-Matarise, Kirsten
Donovan and Atul Prakash in London; Editing by Kenneth Barry)
