* U.S. stocks rise after strong economic data
* U.S. dollar firm on US economic data
* U.S. Treasuries down as risk appetite increases (Updates with U.S. markets, changes byline, dateline, previous LONDON)
By Manuela Badawy
NEW YORK, Feb 17 (Reuters) - U.S. stocks opened higher and the U.S. dollar recovered some ground on Wednesday helped by better U.S. economic data, though concern lingered about fiscal problems in Europe.
European shares were trading at two-week highs as
forecast-beating results from BNP Paribas
MSCI world equity index <.MIWD00000PUS> rose 0.8 percent, while the pan-European FTSEurofirst 300 <.FTEU3> index of top European shares was up 1.39 percent at the highest since early February. The benchmark index is up 56 percent since hitting a record low in March 2009.
U.S. stocks were also boosted by strong results from farm
equipment maker Deere & Co
The Dow Jones industrial average <.DJI> was up 28.11 points, or 0.27 percent, at 10,296.92. The Standard & Poor's 500 Index <.SPX> was up 2.98 points, or 0.27 percent, at 1,097.85. The Nasdaq Composite Index <.IXIC> was up 7.01 points, or 0.32 percent, at 2,221.20.
"Evaluating the whole (U.S. earnings) season, (of) the companies that have reported so far, about two-thirds have beaten on revenues (and) about three-quarters have beaten on earnings, so the earnings season has been terrific," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
"And other issues, the most recent of which is Greece, are starting to dissipate and maybe this nascent improvement in share prices we've seen the past couple of days has legs."
In currencies, the dollar was up against a basket of major trading-partner currencies, with the U.S. dollar index <.DXY> up 0.7 percent at 80.235.
The euro
The U.S. Commerce Department reported on Wednesday that housing starts hit their highest in six months while Federal Reserve data showed industrial output rose a solid 0.9 percent in January, signs that an economic recovery was taking a firm hold as the year began.
Groundbreaking for new homes increased 2.8 percent to a seasonally adjusted annual rate of 591,000 units while new building permits, which give a sense of future construction, fell 4.9 percent to 621,000 units last month after rising to a 14-month high of 653,000 in December, the Commerce Department said. That compared to analysts' forecasts for 620,000 units.
"We have seen the dollar rally a bit here as the data has come out slightly more positive than expected. The building permit data also registered slightly stronger than expected," said John Doyle, currency strategist at Tempus Consulting in Washington.
"It's a sign of future construction and (shows) a stabilizing housing market. The dollar is trading on that data right now and I think investors' sentiment will shift to focus on the FOMC meeting minutes to be released later today."
The Fed -- the U.S. central bank -- will release minutes from the Jan. 26-27 Federal Open Market Committee policy meeting later in the day.
Housing, which is at the core of the most painful economic downturn since the Great Depression, is crawling out of a three-year slump, supported by government programs. New home construction contributed to economic growth in the third quarter of 2009 for the first time since 2005. For more see [ID:nN17114831].
U.S. bonds were left out of favor compared to stocks, which
tend to perform better during times of economic growth. The
benchmark 10-year Treasury note
Stocks gained worldwide on rekindled investor risk appetite, which had taken a hit from concerns about the swollen debt of Greece and other euro zone countries.
European ministers told Athens on Tuesday it may need to take further steps to bring its debt under control and calm "irrational" financial markets.
In Asia, Japan's Nikkei average <.N225> surged 2.7 percent on Wednesday, chalking up the stock index's biggest daily rise in over two months, as investors snapped up Mitsubishi Corp <8058.T> and other resource-related stocks after a jump in commodities prices. (Additional reporting by Chuck Mikolajczak and Wanfeng Zhou in New York and Natsuko Waki in London; Editing by James Dalgleish)