* Mubarak's resignation revives some risk appetite
* Oil, gold prices fall, stocks rise
* Dollar, Treasuries gain on lingering Middle East caution
(Updates with gold falling, Treasuries rallying)
By Walter Brandimarte
NEW YORK, Feb 11 Oil and gold prices fell while
world stocks rose on Friday after Egyptian President Hosni
Mubarak stepped down, following more than two weeks of popular
unrest that roiled financial markets.
But the U.S. dollar and Treasuries prices kept gains as
investors worried about the transfer of power in Egypt and
potential new uprisings in other countries in the region, which
could affect oil prices again.
The greenback was also supported by data showing the U.S.
economic recovery is gaining traction. Resurgent concerns about
the European sovereign debt crisis weighed on the euro.
"Initially you'll see a pop in the market and oil come off
on the hope that this prevents violence in the streets of
Egypt. But as we go forward, we'll start wondering what's next
for the country," said Jay Suskind, senior vice president at
money management firm Duncan-Williams in Jersey City.
"If there's a sense that Egypt won't go in a
semi-democratic (direction), and that the new power is
unfriendly to the West, we could see some nerves on that.
There's still a lot of uncertainty, along with some cautious
optimism," he added.
Mubarak ceded power to a military council, which will run
the affairs of Egypt, the Arab world's most populous nation. A
free and fair presidential election has been promised for
September. For details, see [ID:nLDE7192NZ].
U.S. crude oil CLc1 prices, which had been rising on
fears of potential supply disruptions from the Middle East,
fell $1.24, or 1.43 percent, to $85.49 per barrel. Spot gold
prices XAU= dropped $2.98, or 0.22 percent, to $1,358.50 an
Key U.S. stock indexes erased early losses to trade
The Dow Jones industrial average .DJI rose 26.19 points,
or 0.21 percent, to 12,255.48, while the Standard & Poor's 500
Index .SPX gained 5.02 points, or 0.38 percent, to 1,326.89.
The Nasdaq Composite Index .IXIC was up 14.03 points, or 0.50
percent, at 2,804.48.
In Europe, the FTSEurofirst 300 .FTEU3 index of top
shares closed up 0.41 percent. MSCI's benchmark All-Country
World Index .MIWD00000PUS edged up 0.16 percent.
"It looks like the stock market is taking the news well,"
said Gary Thayer, chief macro strategist with Wells Fargo in
"One thing that has weighed on investor sentiment is that
the price of oil would go up in the case of political turmoil,
and Mubarak's leaving reduces that possibility."
Despite a slight return in risk appetite, the dollar kept
its gains. The greenback rose 0.33 percent against a basket of
major currencies, based on the U.S. Dollar Index .DXY.
Against the Japanese yen, the dollar JPY= gained 0.32 percent
The dollar was also helped after a survey showed U.S.
consumer sentiment rose to its highest level in eight months in
early February, suggesting the U.S. economic recovery was on
track. Stronger economic growth may eventually translate into
higher Treasuries yields and boost the appeal of the dollar.
The euro EUR= fell 0.49 percent to $1.3526, pressured by
euro zone sovereign debt concerns.
"There are bigger things driving the euro right now," said
Brian Dolan, chief currency strategist at Forex.com in
Bedminster, New Jersey.
"The concerns most heavily weighing on the euro -- the
ongoing debt crisis -- are still there, and for now, the
downside is still in play," he said.
U.S Treasury prices shed some gains after Mubarak's
resignation was announced, but benchmark 10-year notes
US10YT=RR last rose 12/32 in price, with the yield at 3.6551
(Additional reporting by Rodrigo Campos, Richard Leong and
Steven C. Johnson; editing by Kenneth Barry and Jeffrey