* Benchmark stock indexes rise; renewed doubts on stimulus
* Treasuries prices rise on disappointing U.S. home sales
* U.S. dollar index gives up gains
NEW YORK, Aug 23 Benchmark stock indexes around
the world edged higher on Friday, while the dollar fell after a
U.S. government report on new single-family home sales raised
doubts about the timing and extent of cuts to the Federal
Reserve's stimulus program.
New home sales dropped 13.4 percent in July to an annual
rate of 394,000 units, well below expectations, the Commerce
Department said, dimming what has been a bright spot in the U.S.
Europe's main stock markets were steady to higher but
attention remained firmly on Asia after a torrid week that has
wiped billions of dollars from emerging markets for the second
time in two months.
Yields on U.S. Treasuries traded lower but still near
two-year highs, with investors reluctant to break out of recent
ranges, given uncertainty around when the Fed might slow its
massive bond-buying program. The benchmark 10-year U.S. Treasury
note was up 18/32, its yield at 2.818 percent.
"This has been a very unique market situation, with the Fed
stimulus being such an important component to the market rally.
This is uncharted waters for us," said Gordon Charlop, managing
director at Rosenblatt Securities in New York. "So regardless of
what the move is, the fact you are someplace you haven't been
before is cause for uncertainty."
The next Fed monetary policy meeting is set for Sept. 17-18.
The Dow Jones industrial average rose 46.77 points or
0.31 percent, to 15,010.51, the S&P 500 gained 6.54
points or 0.39 percent, to 1,663.50 and the Nasdaq Composite
added 19.085 points or 0.52 percent, to 3,657.792.
The biggest risk facing the U.S. economy is a premature
policy tightening by the Federal Reserve, Stanford University
economist Robert Hall told the Kansas City Federal Reserve
Bank's annual conference in Jackson Hole, Wyoming.
MSCI's emerging share index had its first gain
after six sessions in the red, while selling of India's rupee
subsided after the currency's worst week against the
dollar in decades.
"Hopefully the worst (of the emerging market selling) may
now be over," said Hans Peterson, global head of asset
allocation at SEB investment management. He added that his firm
may soon start "bottom fishing" in Asia.
"It doesn't seem to be a repeat of the 1997 (Asian crisis)
situation ... and it seems like people are not so keen on being
extremely short anymore, so it might twist around a bit."
The dollar surrendered gains against a basket of currencies
after earlier climbing to a three-week peak versus the
yen, helped by the rise in U.S. bond yields on expectations the
Fed will reduce its asset-buying program next month.
This week's market turbulence has been driven by growing
evidence that the Fed is ready to start closing the taps on its
huge stimulus program, a conviction that is being bolstered by
strengthening global data.
Germany confirmed on Friday that its economy grew at a 0.7
percent rate in the second quarter, while Britain revised upward
its growth numbers.
Purchasing managers' surveys this week showed
better-than-expected growth in the euro zone, a Chinese
manufacturing rebound and U.S. manufacturing activity at a
Europe's FTSEurofirst 300, rose 0.4 percent on
Friday. A rebound in Asia and Europe helped push MSCI's global
share index up 0.8 percent, although it was not
enough to prevent it heading for its third weekly fall.
EMERGING MARKET OUTFLOWS
U.S. Treasury yields tend to set the benchmark for borrowing
costs across the globe, so their recent rise - expected to
continue as the Fed winds down support - is making it more
difficult for indebted countries and firms to pay their bills.
Data from Boston-based fund tracker EPFR Global on Thursday
showed $1.3 billion fled emerging debt funds in the week ending
Aug. 21, the biggest outflow since mid-July.
Whereas May and June's sharp selloff in emerging markets
calmed when the change in direction of U.S. market rates made
shorting (betting against) those assets unprofitable, this time
that did not happen, meaning the selling could run for longer.
Brent and U.S. crude found early support from disruptions to
Libyan exports. Brent crude traded up 1 percent to
$111.01 a barrel, and U.S. crude rose 1.3 percent to
$106.43 a barrel.