* World stocks surge to 9-month highs
* Better-than-expected U.S. data fuels global rally
* U.S. dollar, bonds fall on demand for risky assets
(Updates with U.S. markets, changes byline, dateline; previous
LONDON)
By Manuela Badawy
NEW YORK, Aug 3 (Reuters) - Global stocks surged to a
nine-month high on Monday as improved economic data from the
United States and China spurred investors' appetite for risk.
The U.S. dollar, considered a safe haven, fell to a
10-month low against a basket of six currencies <.DXY> at
77.608 as investors were upbeat on buying riskier assets.
Oil <CLc1> rose almost 3 percent to $71.37 a barrel and
commodity prices surged as investors bid on rising demand from
top consumers China and the United States after
better-than-expected economic data.
U.S. manufacturing shrank in July but slower than in June,
while U.S. construction spending beat expectations in June,
bolstering the view the economy was pulling out of recession.
For more see [].
It was the fifth month in a row that spending on public
construction, which makes up a third of total U.S.
construction, had made gains.
This drove the benchmark S&P 500 Index <.SPX> above the
psychologically important 1,000 level, and Dow Jones industrial
average <> up 1 percent, to 9,261.40. It also pushed the
MSCI all-country world share index <.MIWD00000PUS> up 1.9
percent, eclipsing its previous high for the year reached on
Friday.
"It's another data point showing that the economy is
starting to bottom out here, and perhaps the worst is behind
us," said David Dietze, chief investment strategist at Point
View Financial Services in Summit, New Jersey.
"When you couple some indications that in fact economic
activity is no longer going down but perhaps is even going up,
the need by investors for the safe haven represented by
Treasuries diminishes," Dietze said.
U.S. Treasury bonds sold off. The benchmark 10-year U.S.
Treasury note <US10YT=RR> was down 1-8/32 in price, with the
yield, which moves inversely to price, rising to 3.64 percent
from 3.48 late Friday on a hunt for risk.
Data from China, an engine of growth for the world economy
in the last decade, showed a key gauge of factory output hit a
one-year high, but it was fueled by domestic orders rather than
still anemic exports to the West. []
Gold and silver prices rose to seven-week highs as the
dollar slid against the euro to its lowest since mid-December,
boosted by investors' appetite for hard assets.
Spot gold <XAU=> hit an intraday high of $961.70 an ounce,
matching the high set on June 11, and silver <XAG=> touched
$14.47 an ounce, its highest since mid-June.
"The improvement in U.S. economic data should further boost
risk-seeking and weigh on the dollar for now," said Brian Kim,
a currency strategist at UBS in Stamford, Connecticut.
The euro gained against the U.S. dollar more than 1 percent
at $1.4433 <EUR=>.
Emerging markets stocks hit more than nine-month highs as
Morgan Stanley Capital International's emerging markets stock
index <.MSCIEF> rose nearly 2.6 percent, while the MSCI Latin
American stock index <.MILA00000PUS> gained almost 4 percent.
The pan-European FTSEurofirst 300 <> index of top
shares provisionally closed 1.4 percent higher at 941.93 after
touching 947.07, the highest since early November.
Banking stocks added the most points to the index. HSBC
<HSBA.L> gained nearly 5 percent after it reported a pretax
profit above analysts' forecasts. []
Asian stocks clambered to an 11-month high, helped by
Chinese shares.
(Additional reporting by Jessica Mortimer and Jeremy Gaunt in
London; Editing by James Dalgleish)
