* U.S. stocks falter as corporate earnings raise concerns
* Dollar up as U.S. earnings keep investors cautious
* Oil rises above $63 a barrel after U.S. housing data
* Treasuries slip as stronger housing data damp safety bid
(Updates with U.S. markets activity, changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, July 17 (Reuters) - Oil gained on Friday after a
rise in U.S. housing starts in June bolstered prospects for
recovery, but a mixed batch of U.S. corporate earnings raised
some concerns and caused U.S. stocks to pull back from a
four-day rally.
Gold steadied and copper prices rose to their highest level
in more than a month as the U.S. dollar pared earlier gains and
investors took heart from the stronger-than-expected U.S.
housing data. Please see: [] []
A 14.4 percent jump in single-family home starts, the
biggest rise since December 2004, propelled a 3.6 percent in
U.S. housing starts and dampened demand for safe-haven U.S.
government debt. []
Euro zone government debt also fell, with Bund futures
sliding to a two-week low in choppy trade, as European stocks
rose for a fifth session on improving confidence about a global
economic recovery. []
Investors' sentiment was caught between further signs that
a global recession was ending and concerns that the economy is
still weak and has a number of hurdles to overcome.
"There's still an underlying tone of risk aversion looming.
People don't feel comfortable with the economy," said Melvin
Harris, strategist at Advanced Currency Markets in New York.
"Earnings today were not stellar while housing starts data
was good but is a volatile indicator that changes from month to
month," he said.
General Electric Co <GE.N>, the largest U.S. conglomerate,
missed quarterly estimates, discouraging investors after a
four-day rally on Wall Street that had lifted the benchmark
Standard & Poor's 500 Index by about 7 percent.
GE's profits fell by almost half as a slump that has
gripped its finance and media businesses spread to its heavy
industrial units. The conglomerate's revenue fell 17 percent
and its stock slid 6 percent to $11.65. [].
Among other results, Bank of America <BAC.N> posted lower
earnings and Citibank <C.N> relied on a gain from its Smith
Barney deal with Morgan Stanley to turn a profit.
[] Shares of Bank of America dropped 2 percent to
$12.91, while Citigroup traded flat at $3.03.
After 1 p.m., the Dow Jones industrial average <> was
up 4.53 points, or 0.05 percent, at 8,716.35. The Standard &
Poor's 500 Index <.SPX> was down 2.69 points, or 0.29 percent,
at 938.05. The Nasdaq Composite Index <> was down 4.80
points, or 0.25 percent, at 1,880.23.
European shares and London's top share index each posted a
fifth consecutive gain, with banks and commodity stocks the
biggest advancers.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.4 percent at 870.56 points, while the FTSE
100 <> closed up up 0.6 percent at 4388.75, its biggest
weekly rise since early January.
"Investors are becoming more confident that the recovery is
now in its formative stages," said Mike Lenhoff, strategist at
Brewin Dolphin.
"While some results are going to be negative they probably
are not going to be as negative as they have been, while other
companies are going to have positive earnings," he said.
Oil bounced above $63 a barrel and was on track for a gain
of more than 4 percent this week, snapping four straight weekly
declines thanks to stronger equities markets, better corporate
results and positive economic data, particularly from Asia.
[]
U.S. light sweet crude oil <CLc1> rose $1.78 to $63.80 a
barrel in New York.
The dollar pared gains against the euro, supporting
interest in gold as a currency hedge. []
Spot gold prices <XAU=> rose $1.95 to $938.30.
Copper prices rose to their highest in more than a month on
Friday as the dollar pared earlier gains and investors seeking
signs of economic recovery took heart from
stronger-than-expected U.S. housing data. []
Zinc and lead both rose more than 5 percent, tracking gains
in copper, after the U.S. housing data, suggesting the heavily
battered housing sector was beginning to stabilize.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.20 percent at 79.373.
The euro <EUR=> was down 0.09 percent at $1.4133, and
against the yen, the dollar <JPY=> was up 0.25 percent at
94.02.
The rise in U.S. housing starts led government debt lower.
"This is another piece of data for those who see the
recession ending soon," said William O'Donnell, head treasury
strategist at RBS Securities in Greenwich, Connecticut.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 10/32 in price to yield 3.61 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 1/32 in price to yield 0.99
percent.
Bomb blasts at hotels in Indonesia also dampened risk
sentiment, though most analysts said the effect was limited.
Asian shares extended gains on hopes the global recession
is ending after key U.S. companies beat earnings expectations.
Asian shares ex-Japan <.MIAPJ0000PUS> rose 1.2 percent and were
on track for their highest close in a month.
Japan's benchmark Nikkei <> clawed up 0.6 percent to
9,395.32. Gains have been limited by political uncertainty
since Monday, when embattled Prime Minister Taro Aso said he
aimed to call an election for Aug. 30.
(Reporting by Rodrigo Campos, Ellen Freilich and Steven C.
Johnson in New York; Ian Chua, Christopher Johnson, Joanne
Frearson and David Brett in London; writing by Herbert Lash;
editing by Leslie Adler)
