* 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
(Adds close of U.S. markets)
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 ID:nLAG003567
Also on Wednesday, oil prices fell after government data
showed a rise in U.S. gasoline inventories ahead of the July 4
Independence Day holiday, traditionally the peak of the U.S.
summer driving season.
But reassuring data from the United States, China and
Europe signaled to many investors that the global economy,
shackled by a deep recession, is on the road to recovery.
A day after stock markets around world wrapped up their
best quarter in a decade, investors plowed new money into
equities, boosting growth-sensitive sectors like energy,
industrials, technology and materials, among other areas.
"We think the economy has bottomed out and we'll see some
positive GDP this quarter," said Maury Fertig, chief investment
officer of Relative Value Partners in Northbrook, Illinois.
The release on Thursday of key U.S. non-farm payrolls data
for June led stocks to finish sharply off their highs.
The Dow Jones industrial average .DJI rose 57.06 points, or
0.68 percent, at 8,504.06. The Standard & Poor's 500 Index .SPX
gained 4.01 points, or 0.44 percent, to 923.33. The Nasdaq
Composite Index .IXIC ended up 10.68 points, or 0.58 percent,
at 1,845.72.
Natural resource and energy stocks rose as copper for
September delivery HGU9 rose 2.6 percent, nickel jumped 6.1
percent and zinc gained 2.9 percent.
Shares of Exxon Mobil Corp rose 0.93 percent and Chevron
Corp gained 0.41 percent.
Among miners, Freeport-McMoRan Copper & Gold Inc climbed
0.92 percent and Alcoa Inc rose 0.19 percent.
The weak dollar helped spur commodity prices, along with
data showing that China's manufacturing sector extended a
steady recovery in June.
"It's all about the dollar and it's all about the
confidence in the Chinese recovery to continue," said Michael
Pento, chief economist with Delta Global Advisors in Huntington
Beach, California.
Trading was light because of the absence of investors in
U.S. markets in a holiday-shortened week. U.S. financial
markets will be closed on Friday for the Independence Day
holiday.
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.
The FTSEurofirst 300 .FTEU3 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= traded up 0.8 percent on the day at $1.4147.
It earlier traded 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 0.6 percent to 79.649.
Benchmark 10-year Treasury notes US10YT=RR declined 2/32
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 4/32 higher in price to
yield 1.05 percent.
U.S. crude settled 58 cents lower at $69.31 a barrel, after
rising as high as $71.85. London Brent crude fell 51 cents to
settle at $68.79 a barrel.
Gold climbed as the China news about a reserve currency
sent the dollar reeling, highlighting the status of gold as a
hedge against a falling U.S. currency.
U.S. August futures GCQ9 settled up $13.90 at $941.30 an
ounce in New York.
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 .N225 fluctuated
heavily before closing 0.2 percent lower.
