* World stocks hit 15-months high first day of 2010
* Safe-haven dollar, bonds slip
* CRB commodity index touch 14-1/2 month high (Updates with closing prices)
By Manuela Badawy
NEW YORK, Jan 4 (Reuters) - World stocks started the year with a bang hitting a 15-month high on optimism the global economic recovery is sustainable, while the safe-haven U.S. dollar slid as investor risk appetite grew.
The weak dollar pushed energy and commodity prices higher while safe-haven U.S. Treasury yields eased from near seven-month highs.
The MSCI's all-country world stock index <.MIWD00000PUS> rose more than 1.6 percent, a level not seen since October 2008 just after the collapse of U.S. investment bank Lehman Brothers triggered financial turmoil. The Thomson Reuters Equity Global Index <.TRXFLDGLPU> was up 1.57 percent at 130.58.
Investors got an early boost with U.S. manufacturing sector data showing growth for a fifth straight month in December, its best showing since early 2006, adding to hopes of a more robust U.S. recovery in 2010. [ID:nN04237488]
"This is for real, this is sustainable. You are starting to see the rationalization of the economy coming around. Some of the nay-sayers are starting to become believers and that's what is happening," said Keith Springer, President at Capital Financial Advisory Services in Sacramento, California.
"It's a Goldilocks economy because the Fed is promising to keep interest rates low for at least the whole year which will keep borrowing costs down ... if you can have that while the economy starts to strengthen, then you are going to have a very good rebound and a good rally in stocks," he added.
A Goldilocks economy is a not too hot or cold economy, sustaining moderate economic growth with low inflation that allows market-friendly monetary policy.
The Dow Jones industrial average <.DJI> rose 1.50 percent, to 10,583.96. The Standard & Poor's 500 Index <.SPX> rose 1.60 percent, to 1,132.98 and the Nasdaq Composite Index <.IXIC> rose 1.73 percent, at 2,308.42.
DOLLAR DOWN, JOBS EYED
The U.S. dollar slid as investors hesitated to push it higher against its peers ahead of Friday's U.S. non-farm payrolls report. Payrolls have been in uninterrupted decline since January 2008.
The single currency recovered to trade at $1.4408 from earlier falls, which took it as low as $1.4258 and testing December's low around $1.4218.
The dollar fell against a basket of trading-partner
currencies, with the dollar Index <.DXY> down 0.44 percent at
77.519. Against the Japanese yen, the dollar
Market players will want to see an improvement to the high unemployment that has battered consumer confidence and spending in the United States. Consumer spending is the backbone of the U.S. economy, accounting for two-thirds of activity.
Most economists think economic growth strengthened in the fourth quarter, however it does not mean that companies which cut to the bone to survive the deep recession, will in fact re-hire as productivity remains high.
"Investors are squaring positions ahead of some key numbers." said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.
"Obviously, the jobs number will headline this week's data but we do have some numbers that will either confirm that a U.S. recovery is gaining traction or could dampen some of the recent enthusiasm that the dollar enjoyed."
The earnings season is to unofficially start on Jan. 11 with aluminum producer Alcoa, a Dow component, set to report fourth quarter results.
COMMODITIES RALLY
The drop in the dollar and colder than normal temperatures
in the U.S. spurred a buying opportunity for crude oil
Gold
The Reuters-Jefferies CRB <.CRB> commodity index (a benchmark basket of 19 futures), rose 2.10 percent touching a 14-1/2 month high.
Coming off its worst year in a decade and worst month in
more than five years, U.S. Treasury debt prices rose, with
benchmark 10-year U.S. Treasury notes
Earlier in the trading day, the FTSEurofirst 300 <.FTEU3> index of top European shares and Japan's Nikkei average both hit 15-months closing highs on their first trading day of the year.
(Editing by Andrew Hay)