* U.S., European stocks rise on surprise corporate results
* Grim U.S. consumer confidence data lifts dollar vs euro
* Oil falls ahead of expected build in U.S. inventory data
* Dollar at break-even against basket of major currencies
(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Jan 27 (Reuters) - Better-than-expected corporate
results lifted U.S. and European stocks on Tuesday but a plunge
in U.S. consumer confidence capped a rise in equities as it
reminded investors of a bleak economic outlook.
European stocks staged a late rally as Siemens, the German
industrial conglomerate, calmed investors' fears about earnings
at companies reeling from the global slowdown.
The dire outlook worldwide boosted the greenback's
safe-haven appeal as currencies sharply shifted direction in
volatile trade. Traders seemed to favor the lower-yielding
dollar and yen over higher-yielding currencies.
Oil prices fell toward $43 a barrel as the fall in U.S.
consumer confidence stirred fears about demand in the United
States, the world's top energy consumer, and ahead of data
expected to show rising fuel inventories in the United States,
another reflection of slowing economic growth.
American Express <AXP.N> led the Dow higher, gaining 5.9
percent after its results late Monday surpassed expectations.
However, like many companies, it warned 2009 will be tough.
"We've had some more numbers coming through that have been
-- I don't want to say good -- but to some extent not as bad as
people had thought," said Tim Smalls, head of U.S. stock
trading at brokerage firm Execution LLC in Greenwich,
Connecticut.
The Conference Board's report that U.S. consumer confidence
index fell to a record low in January, dragged down by a
slumping housing sector and jitters over job prospects, cut
gains in U.S. stocks and dragged down European shares by 1
percent, though markets later rebounded.
"When you have consumer confidence come out and question
yet again the strength of any kind of activity economically,
you're going to have those gains really pare down," said Bruce
Zaro, chief technical strategist at Delta Global Advisors in
Boston.
Before 1 p.m., the Dow Jones industrial average <> was
up 90.32 points, or 1.11 percent, at 8,206.35. The Standard &
Poor's 500 Index <.SPX> was up 12.00 points, or 1.43 percent,
at 848.57. The Nasdaq Composite Index <> was up 20.58
points, or 1.38 percent, at 1,510.04.
Chip maker Texas Instruments reported a quarterly profit
that fell less than feared and announced a 12 percent cut in
jobs, pushing its shares up 3.6 percent and helping the
Philadelphia Semiconductor Index <.SOXX> rise 3.2 percent.
Among the unexpected bright spots: Travelers Cos Inc
<TRV.N>, a large U.S. home, auto and commercial insurer, posted
better-than-expected quarterly operating earnings. Its shares
gained 7 percent.
Hershey Co <HSY.N> reported higher-than-expected quarterly
profit as increased spending on marketing lifted sales of its
namesake candy and Reese's brands. Shares rose 4.5 percent.
In Europe the FTSEurofirst 300 <> index of top
regional shares staged a late rally and closed 0.1 percent
higher at 785.64 points.
Siemens stuck <SIEGn.DE> to its full-year profit outlook,
sending its stock up 2.8 percent and boosting industrial
shares, with Alstom <ALSO.PA> gaining 4.2 percent.
But many investors remained skeptical.
"Short-term rallies are to be expected, but stocks will
certainly revisit their historical lows before we get an
L-shaped recovery, with anemic growth for a while," said Pierre
Sabatier, head of strategy at Pythagore Investment, in Paris.
U.S. Treasury debt prices rebounded as traders speculated
that a week of steep losses might force Federal Reserve
policy-makers to approve the buying of longer-dated bonds.
The prospect of a huge wave of U.S. government debt
issuance, highlighted by an expected record auction of $40
billion of two-year notes on Tuesday, has pushed Treasury bond
prices lower and yields higher. That threatens to push rates up
on consumer and business loans and prolong the recession.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
6/32 in price yield 2.62 percent. The 30-year U.S. Treasury
bond <US30YT=RR> gained 35/32 in price yield to 3.33 percent.
The dollar was break-even against a basket of major
currencies, with the U.S. Dollar Index <.DXY> at 84.394.
The euro <EUR=> rose 0.09 percent at $1.3177, and against
the yen, the dollar <JPY=> was off 0.02 percent at 88.98.
U.S. light sweet crude oil <CLc1> fell $2.23 to $43.50 a
barrel in New York.
Spot gold prices <XAU=> fell $3.35 to $899.75 an ounce.
Japan's Nikkei average <> rose 4.9 percent, its
biggest one-day gain in percentage terms since mid-December,
after the government unveiled a $16.7 billion program to buy
stakes in non-financial companies threated with collapse.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> was up 1.36 percent,
(Reporting by John Parry, Leah Schnurr in New York; Jane
Merriman in London and Blaise Robinson in Paris; writing by
Herbert Lash; Editing by Leslie Adler)
