* U.S. stocks add to gains on surprising factory data
* Dollar down vs euro, up vs yen as sentiment firms
* Oil rises above $53 a barrel as confidence improves
* Bonds slide on stronger data, heavy supply calendar
(Recasts, updates U.S. markets; changes dateline, previous
LONDON)
By Herbert Lash
NEW YORK, May 1 (Reuters) - Oil prices rose on Friday on a
surprisingly strong reading of U.S. consumer sentiment and more
upbeat factory news and U.S. stocks seesawed over break-even as
investors booked gains after the best gains in April in years.
U.S. government bond prices fell, sending yields to new
5-month highs due to improved consumer sentiments and less
shrinkage in the U.S. factory sector in April. For details,
see []
A survey showing U.S. consumers felt more confident about
the economy last month than at any time since the September
failure of Lehman Brothers pushed global banking to the brink
added support to the view that the recession is bottoming out.
Sentiment also was supported by encouraging data from Asian
export powerhouses China and South Korea. But trading volume
was weak as markets around the world were closed for the May 1
holiday. Japan and London markets will shut on Monday.
The dollar climbed to a two-week high against the yen but
slipped against the euro and perceived higher-risk currencies
as investors bet the worst is past.
"As global equities recover and more optimistic economic
indicators roll out, more people will say 'Get into equities
before others,' and as that happens they will move out of
low-risk assets," said Sacha Tihanyi, currency strategist at
Scotia Capital in Toronto.
At 1 p.m., the Dow Jones industrial average <> was up
0.40 points, or 0.00 percent, at 8,168.52. The Standard &
Poor's 500 Index <.SPX> was up 2.08 points, or 0.24 percent, at
874.89. The Nasdaq Composite Index <> was up 1.91 points,
or 0.11 percent, at 1,719.21.
Recent economic data and a note of optimism from the U.S.
Federal Reserve this week has boosted risk appetite worldwide.
Investors were encouraged by data overnight showing Chinese
manufacturing gained further momentum in April, as well as by
Friday's better-than-expected UK manufacturing
survey.[][].
An almost 4 percent rise in oil prices lifted Exxon Mobil
<XOM.N> and other energy stocks, which helped U.S. equity
indexes climb slightly higher. Exxon rose 1.3 percent to
$67.51, and the S&P energy index <.GSPE> gained 2.5 percent.
Oil <CLc1> rose above $53 a barrel on improved consumer
sentiment and evidence of record compliance by the Organization
of Petroleum Exporting Countries to abide by output cuts.
OPEC reduced supply in April, implementing 84 percent of an
agreed output cut, a Reuters survey showed. Compliance set a
record, with the average around 60 percent. []
U.S. light sweet crude oil <CLc1> rose $2.04 to $53.16 a
barrel.
Downward pressure on stocks came from investors who chose
to book some gains after the strong run-up since the bear
market low in early March. The benchmark S&P 500 index recorded
its biggest rise in nine years last month.
"I think people are starting to feel they need to take
profits on some on the gains they've had," said Angel Mata,
managing director of listed trading at Stifel Nicolaus Capital
Markets in Baltimore.
Britain's top share index was flat by the close after sharp
gains the previous two sessions, with rising mining stocks
offset profit taking in energy and defensives.
The pan-European FTSEurofirst <> closed 0.1 percent
higher at 829.65 and the FTSE 100 <> index closed 0.49
points lower at 4,243.22. Other European markets were closed.
Miners gained as metal prices firmed, with copper <MCU3=LX>
rising more than 3 percent to hit one-week highs.
"Slowly the economic data is looking more like a two-way
street, there's more balance and the financial system is
looking less stressed than it did a few months ago," said Kevin
Gardiner, head of global equity strategy at HSBC Investment
Bank.
The euro <EUR=> rose 0.24 percent at $1.3258.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.23 percent at 84.632.
Against the yen, the dollar <JPY=> rose 0.88 percent at 99.43.
U.S. Treasury debt prices were lower.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
20/32 in price to yield 3.20 percent. The 2-year U.S. Treasury
note <US2YT=RR> fell 2/32 in price to yield 0.94 percent.
Gold dipped as a recovery in risk appetite, reflected in a
firmer tone to global stocks, dented interest.
Spot gold prices <XAU=> rose 80 cents to $886.30 an ounce.
Japanese stocks set a four-month closing high, with the
Nikkei average <> gaining 1.7 percent despite more bleak
data showing the economy slipping back into deflation and
unemployment rising at a record pace in March. []
But the MSCI index of Asia-Pacific shares <.MIAPJ0000PUS>
outside Japan dipped 0.2 percent and pulled back from a
six-month high, mainly on a slight drop in Australian shares
<>. Most markets included in the index were closed.
(Reporting by Leah Schnurr, Nick Olivari and Ellen Freilich in
New York; Ikuko Kao and Simon Falush in London; writing by
Herbert Lash)
(Editing by Theodore d'Afflisio)
