* Rising U.S. durable goods orders, housing prices bolster
* China's central bank soothes credit worries, lifting
* Government debt prices slip on economic data
* Oil rises above $101 on easing liquidity fears, Canada
By Herbert Lash
NEW YORK, June 25 The dollar recovered from
early losses and global equity markets rose on Tuesday after
better-than-expected government reports on the U.S. economy and
strong consumer confidence data gave investors a reprieve about
worries over Federal Reserve policy.
Orders for durable goods rose more than expected in May and
a gauge of planned business spending gained for a third straight
month, while existing single-family home prices posted their
biggest rise in seven years in April.
In another better-than-expected report, the Conference
Board's U.S. consumer confidence index rose in June to 81.4 from
a downwardly revised 74.3 in the prior month, the private
business research group reported.
At first blush, the data would be seen as bullish as the
economy is improving. But that suggests the Fed can move forward
with plans to ease its bond-buying program. Fears of such a move
have led bond yields to jump and stocks to drop in recent days.
"The market trend has turned to the downside. It is now
easier to sell rallies than to buy dips, so strategies have
flipped," said Donald Selkin, chief market strategist at
National Securities in New York, which has about $3 billion in
assets under management.
Global markets tracked by MSCI's all-country world equity
index were up 0.66 percent, while the
FTSEurofirst 300 index of leading European companies
rose 1.36 percent, recovering some of the 5.5 percent it lost in
the previous three trading days.
The Dow Jones industrial average was up 92.54
points, or 0.63 percent, at 14,752.10. The Standard & Poor's 500
Index was up 11.26 points, or 0.72 percent, at 1,584.35.
The Nasdaq Composite Index was up 15.56 points, or 0.47
percent, at 3,336.31.
The pause in the market's recent rout began when two Fed
policymakers on Monday downplayed the notion of an imminent end
to the central bank's money-printing and said the market
reaction was not yet a cause for concern.
Asian markets then capped a day of wild swings, during which
Chinese stocks plunged to their lowest since the global
financial crisis began, with a late rally on hopes authorities
in China would step in to prevent a crisis.
China's central bank fueled the talk at a news briefing
where it sought to allay fears of a credit squeeze by committing
to guide interest rates to "reasonable" levels after they had
been allowed to spike over the past week.
The dollar extended gains against the yen and euro on
Tuesday after data showed sales of new U.S. single-family homes
rose to their highest in nearly five years in May, confirming
the housing market's strengthening tone.
The dollar rose against the yen to 97.76 yen from
about 97.61 yen before the data, up 0.04 percent on the day.
The euro fell to the session low of $1.3066 where it
traded before the data. It was trading at 1.3072, down 0.34
Prices of U.S. Treasuries edged down slightly in choppy
trade, while German Bund futures pared their early gains on news
of the manufacturing data.
The benchmark 10-year U.S. Treasury note was
down 11/32 in price to yield 2.5838 percent.
Bund futures traded at 140.50, up 19 ticks from
Monday's close, having risen as high as 141.01 before the data.
Oil was above $101 a barrel, rebounding from a three-week
low, as investor concern eased about a liquidity crunch in China
and as Canadian pipeline closures threatened exports to the
Brent crude rose 54 cents to $101.70 a barrel. U.S.
oil rose 36 cents to $95.54.
"Stock markets are up and commodity prices are up across the
board," said Carsten Fritsch, analyst at Commerzbank in
Frankfurt, adding that the Chinese officials' comments had
prompted a change in market sentiment.