* US dollar, bonds rise on weak consumer confidence data
* BP's strong earnings lift Dow
* Volatility index rises, investors move to safer havens (Updates with closing prices)
By Manuela Badawy
NEW YORK, Oct 27 (Reuters) - The U.S. dollar and bonds rose on Tuesday as investors moved into safer havens after data showed U.S. consumer confidence deteriorated in October, reviving worries over the pace of an economic rebound.
The U.S. dollar rose to two-week highs against the euro while bonds surged, driving yields, which move inversely to price, down from two-month highs.
Consumer confidence in the United States soured as the worst labor market in a quarter century increased concerns over the likely extent of an improvement in the future.
"This report reminds us that the economic recovery will be soggy at best unless the consumer starts to feel better and spend more," said Cary Leahey, an economist at Decision Economics in New York.
Consumers are the backbone of the U.S. economy, so a weak confidence report bodes ill for the economic recovery because it indicates restrained consumer spending.
The Conference Board's index of consumer confidence fell to 47.7 in October, weaker than the consensus expectation of a reading of 53.1. Confidence was pressured on growing concerns that job market conditions would worsen in the near term. [ID:nN27241974]
Other data showed home prices rose for the fourth-straight month in August, but did little to boost markets throughout the day. The Standard & Poor's/Case-Shiller composite index of home prices in 20 metropolitan areas rose more than expected in August. For more see [ID:nN27236301].
In late trading, the euro was down 0.54 percent at $1.4789
after touching $1.4787
The dollar index <.DXY>, a measure of its performance against six other major currencies, rose to 76.323, a two-week high, well above a 14-month low of 74.94 hit last week.
U.S. Treasuries extended gains on Tuesday following the auction of $44 billion of two-year notes, part of this week's record $123 billion supply of government bonds.
The benchmark 10-year U.S. Treasury note
Euro-zone government bonds also rallied, with Bund futures posting their biggest one-day gain in a month, on the back of the weak U.S. consumer data that boosted demand for these lower-risk assets.
STOCKS SEESAW
The S&P 500 and the Nasdaq fell as investors booked
profits following the stock market's recent run-up. The Dow
clung to a modest gain as shares of U.S. stocks Exxon Mobil
Oil prices
"There is definitely a gathering bullishness around energy at large, which is helping support things," said Matt Kaufler, portfolio manager and equity analyst at Clover Capital Management in Rochester, New York.
"If you believe the worst of the contraction is behind us, you're going to see oil prices continuing to rise."
The Dow Jones industrial average <.DJI> closed up 14.21 points, or 0.14 percent, at 9,882.17. The Standard & Poor's 500 Index <.SPX> closed down 3.54 points, or 0.33 percent, at 1,063.41. The Nasdaq Composite Index <.IXIC> closed down 25.76 points, or 1.20 percent, at 2,116.09.
The Nasdaq fell after Chinese Internet search giant
Baidu.com
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed up 0.3 percent, supported by BP's report.
Meanwhile, the Chicago Board Options Exchange Volatility Index <.VIX>, Wall Street's favorite barometer of investor sentiment, shot up to its highest level in four weeks, indicating worries about future losses.
This sentiment swept over into Tuesday trading with MSCI's all-country world stocks index <.MIWD00000PUS> down 1 percent, its emerging market sub-index <.MSCIEF> down 2.1 percent and Japan's Nikkei <.N225> closing down 1.45 percent. (Additional reporting by Ellis Mnyandu; Editing by Jan Paschal)