* Euro rises vs dollar on profit-taking
* U.S. stocks mixed in volatile trade
* Gold hits record high on flight-to-safety
By Manuela Badawy
NEW YORK, June 8 (Reuters) - The euro rose against the U.S.
dollar on Tuesday, but U.S. stocks ended mixed in choppy
trading as investors remained jittery about Europe's debt
troubles.
U.S. Federal Reserve Chairman Ben Bernanke's reassuring
comments on the state of the U.S. economy late Monday helped
support U.S. stocks, but a report by Fitch Ratings that the UK
faced a "formidable" fiscal challenge pushed European stocks to
near two-week closing lows.
Risk-averse investors streamed into gold, sending prices
for the precious metal to a record dollar high amid fears that
euro zone credit contagion could stunt global economic growth.
Bernanke said the U.S. economy seemed to have enough
momentum to avoid a "double-dip" recession, while European
leaders were committed to ensuring the survival of the euro and
had enough money to meet obligations of heavily indebted member
nations. For details, see []
Still, traders remained anxious about debt levels in
several euro zone countries, as Portugal, Italy and Spain
prepared to sell new bonds this week. It will be the first sale
by Spain since a credit ratings downgrade.
"Investors are sort of cautiously paring back their
international exposure and, even within the S&P 500, trying to
position in a domestic theme," said Jack Ablin, chief
investment officer of Harris Private Bank in Chicago.
The Dow Jones industrial average <> closed up 123.49
points, or 1.26 percent, at 9,939.98. The Standard & Poor's 500
Index <.SPX> rose 11.53 points, or 1.10 percent, at 1,062.00.
The Nasdaq Composite Index <> fell 3.33 points, or 0.15
percent, at 2,170.57.
The pan-European FTSEurofirst 300 <> index of top
shares closed down 1 percent, falling for the third consecutive
session, but the MSCI's all-country world stock index
<.MIWD00000PUS> gained 0.48 percent with support from U.S.
stocks.
EUROPE IN FOCUS
The euro rose above $1.20 against the dollar a day after
hitting its lowest level since March 2006, and pared losses
against the Swiss franc as traders cited possible intervention
by the Swiss National Bank. []
The euro <EUR=> was last up 0.32 percent at $1.1952 from a
previous session close of $1.1914.
"The euro decline isn't over," said Marc Chandler, senior
strategist at Brown Brothers Harriman in New York. "There are
supply concerns this week, and what we're seeing now is a brief
respite. A rise above $1.20 would be a good chance to sell."
The pound fell after Fitch urged Britain to cut its
deficit, the latest in a series of concerns expressed by rating
agencies about the state of government finances in Europe,
encompassing Greece, Spain, Hungary, and Ireland.
[]
Solving debt problems implies heavy budget cuts at a time
when many believe spending is needed to help keep economic
recovery on track.
Meanwhile, safe-haven U.S. Treasury debt prices fell giving
up some recent gains, as investors reduced safe-haven holdings
to prepare for this week's $70 billion in government bond
supply.
The first of this week's three auctions -- $36 billion of
three-year notes -- received solid demand on lingering worries
over contagion from Europe's sovereign debt crisis.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 10/32, with the yield at 3.1803 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 2/32, with the yield at 0.742
percent. The 30-year U.S. Treasury bond <US30YT=RR> was down
15/32, with the yield at 4.1077 percent.
Spot gold prices rose above $1,250 an ounce, a record high,
benefiting from fears the European sovereign debt crisis may
spread, weighing on a global recovery.
"It is mainly the fear of another slide into recession
which is seeing demand for gold as a safe haven," said
Commerzbank analyst Daniel Briesemann.
(Additional reporting by Rodrigo Campos, Richard Leong and
Steven C. Johnson in New York)
