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GLOBAL MARKETS-Stocks extend gains on US data; dollar slips

Published 12/24/2009, 02:02 PM
Updated 12/24/2009, 02:06 PM
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* Jobless claims, durable goods orders better than forecast

* World stocks up for 4th day, Europe ends at 15-month high

* Dollar slips for 2nd straight day in thin trade

By Walter Brandimarte

NEW YORK, Dec 24 (Reuters) - U.S. and European stocks hit more than one-year closing highs on Thursday after better-than-expected U.S. jobless claims and durable goods orders drove optimism that the economic recovery is gaining hold, while the dollar slipped after a recent rally.

Oil and gold prices got a boost from the weaker dollar, which makes commodities cheaper for investors using other currencies.

On Wall Street, the Standard & Poor's 500 marked a 15-month closing high and the Dow Jones hit a 14-month closing high, while European stocks closed at their highest level in nearly 15 months. Volumes were thin, however, in a shortened Christmas Eve session.

"To be in this upbeat position is good, after all the pain and unhappiness of last year," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London. "The question is whether the rally will be sustained into the new year, and I think it will. We know the profits story will be supportive, with topline growth."

Underpinning investor optimism was data showing that new orders for long-lasting U.S. manufactured goods excluding transportation surged 2 percent in November, twice what markets expected. For more, see [ID:nN24182733].

And new claims for unemployment benefits in the United States fell 28,000 to a 15-month low of 452,000 last week.

The Dow Jones industrial average <.DJI> closed up 53.66 points, or 0.51 percent, at 10,520.10, while the Standard & Poor's 500 Index <.SPX> climbed 5.89 points, or 0.53 percent, to 1,126.48. The Nasdaq Composite Index <.IXIC> added 16.05 points, or 0.71 percent, to 2,285.69.

Shares of Apple Inc jumped 3.4 percent to $209.04, after hitting an all-time high of $209.35, on growing excitement over the expected but unconfirmed release of a tablet computer. [ID:nN24186088]

The health-care sector, which has rallied recently as health reform legislation appeared less ominous than had been feared, weakened on Thursday. The U.S. Senate cleared the last hurdle on U.S. President Barack Obama's health-care overhaul on Thursday, but the bill must now be reconciled with the measure recently approved by the U.S. House of Representatives. The Morgan Stanley Healthcare Payor index <.HMO> fell 0.26 percent. [ID:nN23220406]

In Europe, the FTSEurofirst 300 index <.FTEU3> of leading shares ended 0.1 percent higher, driven by commodities and bank stocks.

The index is up nearly 61 percent from its lifetime low of March 9 and is up about 25 percent to date in 2009, on track for its best year since 1999, when it surged nearly 34 percent.

The MSCI all-country world stock index <.MIWD00000PUS> climb 0.5 percent, in its fourth straight session of gains.

The MSCI index for emerging market shares rose 0.95 percent, adding to its gains of more than 70 percent so far this year.

U.S. crude oil rose $1.06, or 1.38 percent, to $77.73 per barrel, while spot gold prices gained 1.62 percent to $1,104.30.

DOLLAR SLIDES AGAIN

The U.S. dollar slid for the second consecutive session against the euro despite the positive U.S. data, as investors sought to lock in recent gains.

Trade was extremely thin in Europe and the United States ahead of Friday's Christmas holiday, and traders were wary of reading too much into current price movements.

The euro firmed 0.20 percent to $1.4354. Against the Japanese yen, the dollar was up 0.07 percent at 91.61. The greenback was practically unchanged against a basket of major currencies, with the U.S. Dollar Index <.DXY> dipping 0.07 percent.

Treasury prices declined as investors moved into stocks. Also weighing on Treasuries were concerns over the reception of next week's round of government debt auctions.

"There are some lingering jitters about next week's auctions coming in a very quiet week," said William O'Donnell, head of U.S. Treasury strategy at RBS Securities in Stamford, Connecticut.

The Treasury will auction $118 billion of two-year, five-year and seven-year notes next week.

Benchmark 10-year Treasury notes were trading 12/32 lower in price with the yield at 3.8009 percent, up from 3.76 percent late on Wednesday. (Additional reporting by Joanne Frearson, Leah Schnurr, Chris Reese and Wanfeng Zhou; Editing by Leslie Adler)

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