* U.S., European stocks rise on data, Bernanke
* Oil pulls back from 10-month high on profit-taking
* Dollar edges lower on upbeat U.S. data, Bernanke news
* Bonds rise after decent auction of 2-year notes
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Aug 25 World stocks rose to 10-month
highs on Tuesday after Ben Bernanke was nominated for a second
term as Federal Reserve chief and as upbeat U.S. economic data
bolstered optimism, but crude oil sold off on profit taking.
The U.S. dollar slipped against the euro and yen as the
data and Bernanke's nomination led investors to seek out
higher-yielding currencies and assets. [ID:nN25224472]
U.S. Treasury debt prices edged higher as decent demand at
an auction of two-year notes appeared to bode well for auctions
of government debt later in the week. [ID:nN25225690]
Volume was light in many markets, leading to seemingly out
of sync price movements, such as bond investors shrugging off
the solid economic news to bid bonds higher.
Oil, which has closely hugged equity movements during the
monthslong rally, turned lower as traders said crude's more
than 65 percent gain this year was reason to lock in profits.
Copper prices also settled lower as investors booked
profits and took to the sidelines amid worries about
over-heated prices and slowing Chinese demand. [ID:nLP229716]
Investors in equity markets cheered a report that showed
consumer confidence increased more than expected in August,
while the S&P/Case-Shiller home price index rose in June for a
second straight month.
Rebounding home prices, as well as stronger consumer
spending, are seen as critical for the U.S. economy to bounce
back from its worst recession since the Great Depression.
"These numbers are definitely reassuring, though I'm more
focused on the housing data. Still, the consumer confidence is
like gravy today," said Melvin Harris, market strategist, at
Advanced Currency Markets in New York.
"We're not in full-blown recovery mode yet but we are
seeing more normalized markets. Consumer numbers are important
numbers -- they are an indicator of what people are willing to
spend and that matters for GDP growth."
MSCI's all-country world index .MIWD00000PUS, among other
major U.S. and European indexes, set new 10-month highs. The
MSCI index pared earlier gains to be ahead 0.1 percent.
Financial shares were among the top gainers, with the S&P
financial index .GSPF rising 1.1 percent.
The Dow Jones industrial average .DJI closed up 30.01
points, or 0.32 percent, to 9,539.29. The Standard & Poor's 500
Index .SPX rose 2.43 points, or 0.24 percent, to 1,028.00.
The Nasdaq Composite Index .IXIC climbed 6.25 points, or 0.31
percent, to 2,024.23.
After shooting up in early trade to almost 1.0 percent
gains, equity prices slipped, while bond prices rebounded and
the dollar pulled off session lows.
U.S. crude oil CLc1 dropped $2.32 to settle at $72.05 a
barrel, down from a high of $75, in the biggest percentage loss
since Aug. 14. Brent crude LCOc1 dropped $2.44 to $71.82.
U.S. gold futures ended slightly higher as the dollar edged
down against the euro, but bullion trimmed initial gains ahead
of upcoming metal option expirations. [ID:nN25549819]
The December gold contract GCZ9 settled up $2.30 at $946
an ounce in New York.
In Europe, regional shares hit their highest close since
October on the U.S. data, with energy companies and banks
rebounding from earlier losses.
The pan-European FTSEurofirst 300 .FTEU3 index of top
shares closed up 0.4 percent at 978.76.
The euro was up 0.1 percent at $1.4308 EUR= after earlier
hitting $1.4361, while the dollar slipped 0.4 percent to 94.13
yen JPY=. Sterling fell 0.4 percent to $1.6351 GBP=.
Nagging doubts over the strength of a global recovery,
together with mortgage-related hedging, helped mitigate early
losses in U.S. bonds, analysts said. Bonds later rose.
The benchmark 10-year U.S. Treasury note was up 10/32 in
price to yield 3.44 percent.
Asian shares and commodities slipped in a partial reversal
of the previous day's solid gains. MSCI's index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS dropped 0.6 percent, while
Japan's Nikkei average .N225 shed 0.8 percent.
(Reporting by Richard Valdmanis, Rodrigo Campos, Steven C.
Johnson and Burton Frierson in New York; Ian Chua and Joanne
Frearson in London; writing by Herbert Lash)