* Wall Street rally loses steam on profit-taking
* Dollar slips on debt worries after Moody's comment
* Commodities gain on China outlook; copper at record high
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 13 (Reuters) - A stock rally fizzled on Wall
Street on Monday as investors took profits and the dollar fell
after Moody's warned it may change its U.S. outlook if a
tax-cut deal is adopted.
Strong Chinese economic data lifted commodity prices, with
copper prices setting a record high and crude oil surging
before meeting resistance above $89 a barrel on concern about
further anti-inflation measures by China. For details see
[]
The broad S&P 500 index closed flat and the Dow ended just
above break-even as optimism faded over China's move to tame
inflation and on concerns about a 5.1 percent run-up in the S&P
so far in December. []
The benchmark S&P 500 has gained 5.1 percent so far in
December.
"We've had a decent run-up over the last week or so and the
market started out strong, but we saw a bit of profit-taking at
the end," said Giri Cherukuri, head trader at Oakbrook
Investments LLC in Lisle, Illinois.
The Dow Jones industrial average <> closed up 18.24
points, or 0.16 percent, at 11,428.56. The Standard & Poor's
500 Index <.SPX> was barely up 0.06 point at 1,240.46. The
Nasdaq Composite Index <> was down 12.63 points, or 0.48
percent, at 2,624.91.
MSCI's all-country world stock index <.MIWD00000PUS> rose
0.7 percent, and Japanese stock futures were higher in trading
in Chicago.
The dollar slid after Moody's said it could move a step
closer to cutting the United States' Aaa rating if President
Barack Obama's tax and unemployment benefit package becomes
law.
The plan agreed to by Obama and Republican leaders last
week could push up debt levels, the ratings agency said.
"This move is coming as the market starts to price in the
impact of the tax cut deal," said Paresh Upadhyaya, head of
Americas G10 strategy at BofA Merrill Lynch.
"While Moody's saying it increases the chances of a
negative outlook on U.S. ratings isn't new, traders can't help
but contemplate the 'what if' scenario," Upadhaya said.
The dollar fell against major currencies, with the U.S.
Dollar Index <.DXY> down 0.91 percent at 79.338.
The euro <EUR=> was up 1.20 percent at $1.3392, and against
the yen, the dollar <JPY=> was down 0.60 percent at 83.41.
U.S. crude for January delivery <CLc1> rose 82 cents to
settle at $88.61 a barrel. ICE Brent crude for January <LCOc1>
rose 71 cents to settle at $91.19 a barrel.
Gold rose toward $1,400 an ounce, with investors buying
bullion as the dollar weakened, China kept interest rates
steady and a U.S. tax cut extension loomed. []
U.S. gold futures for December delivery settled up $13.10
an ounce at $1,398.
Prices of U.S. Treasuries rebounded after an earlier
selloff sent yields to their highest levels in six months and
brought buyers into the market. []
The benchmark 10-year's yield above 3.375 percent, seen as
a key technical price support point, drew buyers.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
9/32, with the yield at 3.2865 percent.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Reporting by Ryan Vlastelica, Nick Olivari, Robert Gibbons,
Chris Reese and Frank Tang in New York; writing Herbert Lash;
Editing by Kenneth Barry)
