CORRECTED-GLOBAL MARKETS-US stocks little changed, oil at another record

Reuters: [2008-05-16 22:23:00]

(Corrects 7th paragraph to show that shares of Exxon and Chevron rose more than 1.5 percent, not 11.5 percent)

(Adds close of U.S. markets)

* Rising energy shares offset bearish mood in U.S. stocks

* Dollar tumbles on bearish consumer sentiment data

* Gold crosses $900 ounce for first time in three weeks

By Herbert Lash

NEW YORK, May 16 (Reuters) - U.S. stocks were little changed on Friday as oil prices streaking toward $128 a barrel lifted energy shares and offset investor worries about a slump in U.S. consumer confidence to a 28-year low.

Gold, a traditional hedge against inflation, broke above a key psychological level of $900 per ounce for the first time in three weeks as crude oil surged to a record $127.82.

U.S. government debt prices turned lower in afternoon trade as stocks erased a majority of their losses and Treasuries ran into technical "perceived" resistance at 3.78 percent on 10-year yields and 3.03 percent on five-year yields.

The dollar fell as a plunge in U.S. consumer confidence raised concerns about an economic contraction in second quarter and trimmed the chances the Federal Reserve will raise interest rates this year.

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence fell in May to 59.5, its lowest level since June 1980 -- the height of U.S. stagflation.

Oil shot to a fresh peak as a bullish call from investment bank Goldman Sachs, which said crude will average $141 a barrel in the second half of this year due to paper-thin inventories, drowned out an offer of more supply from OPEC kingpin Saudi Arabia.

Shares of Exxon Mobil Corp <XOM.N> and Chevron <CVX.N> rose more than 1.5 percent, supporting the Dow and the broad market Standard & Poor's 500 Index. The rise in oil prices also helped European stock markets close higher.

But even with the climb in oil shares, the blue chip Dow industrials and the Nasdaq fell.

"I think energy prices continuing to move higher are taking a little bit of a toll today. It's not an endless pit for the market to absorb the steadily rising crude prices," said Owen Fitzpatrick, head of the U.S. Equity Group at Deutsche Bank Private Wealth Management.

The Dow Jones industrial average <.DJI> fell 5.86 points, or 0.05 percent, at 12,986.80. The Standard & Poor's 500 Index <.SPX> rose 1.78 points, or 0.13 percent, at 1,425.35. The Nasdaq Composite Index <.IXIC> fell 4.88 points, or 0.19 percent, at 2,528.85.

Financial shares, led by Citigroup <C.N>, Bank of America <BAC.N> and Wells Fargo <WFC.N>, were the biggest sector drag on the benchmark Standard & Poor's 500 Index. Citigroup shares fell 2.6 percent, while Bank of America fell 1.5 percent, and Wells Fargo shed 2.2 percent.

The S&P index of energy shares <.GSPE> jumped 2.5 percent, while the S&P financial index <.GSPF> fell 1.4 percent.

EUROPEAN STOCKS BOOSTED BY ENERGY

European shares rose, fed by the rally in energy stocks, although banks came under pressure and the weak reading in U.S. consumer sentiment knocked the market back from session peaks.

The FTSEurofirst 300 <.FTEU3> index of top European shares closed up 0.4 percent to 1,365.2 points, after earlier rising by as much as 1.2 percent to a four-month high.

Shares of Total, BP and Royal Dutch Shell rose by 1.5 percent to 2.5 percent, making them the three largest positive influences on the broader market.

The dollar fell against major currencies, with the U.S. Dollar Index <.DXY> down 0.73 percent at 72.806.

The euro raced to a session peak of $1.5600, and was last trading at $1.5589 <EUR=>, up almost 1 percent on the day. The dollar tumbled to an intraday low of 103.54 yen <JPY=> and was last quoted at 104.18 yen, down 0.5 percent.

A pause by the U.S. central bank after slashing its fed funds rates target by 3.25 percentage points to 2 percent since mid-September would support the dollar, which has lost its yield appeal to the euro.

Euro-zone interest rates have remained at 4 percent since June, but analysts reckon slower economic growth could force the European Central Bank to move towards an easing path later this year.

"The dollar has appreciated over the last couple of months based on this change in attitude towards what the Fed is going to be doing with interest rates," said Busch. "But we are certainly not at a point where we are going to consider that the Fed will start to raise rates at any point and that's why see the dollar losing ground today."

U.S. Treasury debt prices were lower.

The benchmark 10-year U.S. Treasury note <US10YT=RR> fell 9/32 to yield 3.85 percent. The 2-year U.S. Treasury note <US2YT=RR> fell 2/32 to yield 2.46 percent. The 30-year U.S. Treasury bond <US30YT=RR> fell 16/32 to yield 4.58 percent.

The weak dollar and the sharp rise in crude oil pushed gold to a three-week high, with U.S. gold futures settling up $19.90, or 2.3 percent, at $899.90 an ounce.

U.S. crude <CLc1> settled up $2.17 at $126.29 a barrel after peaking at $127.82 earlier in the day. London Brent <LCOc1> rose $2.36 to $124.99 after hitting $126.34.

Most stock markets across Asia rose modestly. Tokyo slipped and Sydney surged back to closing levels last seen in January, as top miner BHP Billiton <BHP.AX> jumped, propelled by speculation of Chinese interest in the firm.

Japan's Nikkei average <.N225> retreated 0.2 percent while MSCI's index of other Asian stock markets <.MIAPJ0000PUS> rose 1.2 percent. Sydney's benchmark S&P/ASX 200 index <.AXJO> gained 0.7 percent. (Reporting by Kristina Cooke, John Parry, Lucia Mutikani and Nick Olivari in New York and Amanda Cooper in London; Editing by Leslie Adler) ((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters Messaging: herb.lash.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available

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GLOBAL MARKETS-US stocks little changed, oil at another record

Reuters: [2008-05-16 22:13:00]

(Adds close of U.S. markets)

* Rising energy shares offset bearish mood in U.S. stocks

* Dollar tumbles on bearish consumer sentiment data

* Gold crosses $900 ounce for first time in three weeks

By Herbert Lash

NEW YORK, May 16 (Reuters) - U.S. stocks were little changed on Friday as oil prices streaking toward $128 a barrel lifted energy shares and offset investor worries about a slump in U.S. consumer confidence to a 28-year low.

Gold, a traditional hedge against inflation, broke above a key psychological level of $900 per ounce for the first time in three weeks as crude oil surged to a record $127.82.

U.S. government debt prices turned lower in afternoon trade as stocks erased a majority of their losses and Treasuries ran into technical "perceived" resistance at 3.78 percent on 10-year yields and 3.03 percent on five-year yields.

The dollar fell as a plunge in U.S. consumer confidence raised concerns about an economic contraction in second quarter and trimmed the chances the Federal Reserve will raise interest rates this year.

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence fell in May to 59.5, its lowest level since June 1980 -- the height of U.S. stagflation.

Oil shot to a fresh peak as a bullish call from investment bank Goldman Sachs, which said crude will average $141 a barrel in the second half of this year due to paper-thin inventories, drowned out an offer of more supply from OPEC kingpin Saudi Arabia.

Shares of Exxon Mobil Corp <XOM.N> and Chevron <CVX.N> rose more than 11.5 percent, supporting the Dow and the broad market Standard & Poor's 500 Index. The rise in oil prices also helped European stock markets close higher.

But even with the climb in oil shares, the blue chip Dow industrials and the Nasdaq fell.

"I think energy prices continuing to move higher are taking a little bit of a toll today. It's not an endless pit for the market to absorb the steadily rising crude prices," said Owen Fitzpatrick, head of the U.S. Equity Group at Deutsche Bank Private Wealth Management.

The Dow Jones industrial average <.DJI> fell 5.86 points, or 0.05 percent, at 12,986.80. The Standard & Poor's 500 Index <.SPX> rose 1.78 points, or 0.13 percent, at 1,425.35. The Nasdaq Composite Index <.IXIC> fell 4.88 points, or 0.19 percent, at 2,528.85.

Financial shares, led by Citigroup <C.N>, Bank of America <BAC.N> and Wells Fargo <WFC.N>, were the biggest sector drag on the benchmark Standard & Poor's 500 Index. Citigroup shares fell 2.6 percent, while Bank of America fell 1.5 percent, and Wells Fargo shed 2.2 percent.

The S&P index of energy shares <.GSPE> jumped 2.5 percent, while the S&P financial index <.GSPF> fell 1.4 percent.

EUROPEAN STOCKS BOOSTED BY ENERGY

European shares rose, fed by the rally in energy stocks, although banks came under pressure and the weak reading in U.S. consumer sentiment knocked the market back from session peaks.

The FTSEurofirst 300 <.FTEU3> index of top European shares closed up 0.4 percent to 1,365.2 points, after earlier rising by as much as 1.2 percent to a four-month high.

Shares of Total, BP and Royal Dutch Shell rose by 1.5 percent to 2.5 percent, making them the three largest positive influences on the broader market.

The dollar fell against major currencies, with the U.S. Dollar Index <.DXY> down 0.73 percent at 72.806.

The euro raced to a session peak of $1.5600, and was last trading at $1.5589 <EUR=>, up almost 1 percent on the day. The dollar tumbled to an intraday low of 103.54 yen <JPY=> and was last quoted at 104.18 yen, down 0.5 percent.

A pause by the U.S. central bank after slashing its fed funds rates target by 3.25 percentage points to 2 percent since mid-September would support the dollar, which has lost its yield appeal to the euro.

Euro-zone interest rates have remained at 4 percent since June, but analysts reckon slower economic growth could force the European Central Bank to move towards an easing path later this year.

"The dollar has appreciated over the last couple of months based on this change in attitude towards what the Fed is going to be doing with interest rates," said Busch. "But we are certainly not at a point where we are going to consider that the Fed will start to raise rates at any point and that's why see the dollar losing ground today."

U.S. Treasury debt prices were lower.

The benchmark 10-year U.S. Treasury note <US10YT=RR> fell 9/32 to yield 3.85 percent. The 2-year U.S. Treasury note <US2YT=RR> fell 2/32 to yield 2.46 percent. The 30-year U.S. Treasury bond <US30YT=RR> fell 16/32 to yield 4.58 percent.

The weak dollar and the sharp rise in crude oil pushed gold to a three-week high, with U.S. gold futures settling up $19.90, or 2.3 percent, at $899.90 an ounce.

U.S. crude <CLc1> settled up $2.17 at $126.29 a barrel after peaking at $127.82 earlier in the day. London Brent <LCOc1> rose $2.36 to $124.99 after hitting $126.34.

Most stock markets across Asia rose modestly. Tokyo slipped and Sydney surged back to closing levels last seen in January, as top miner BHP Billiton <BHP.AX> jumped, propelled by speculation of Chinese interest in the firm.

Japan's Nikkei average <.N225> retreated 0.2 percent while MSCI's index of other Asian stock markets <.MIAPJ0000PUS> rose 1.2 percent. Sydney's benchmark S&P/ASX 200 index <.AXJO> gained 0.7 percent. (Reporting by Kristina Cooke, John Parry, Lucia Mutikani and Nick Olivari in New York and Amanda Cooper in London; Editing by Leslie Adler) ((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters Messaging:

herb.lash.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available

for: * 3000 Xtra: visit

http://topnews.session.rservices.com

* BridgeStation: view story .134

For more information on Top News:

http://topnews.reuters.com)) Keywords: MARKETS GLOBAL

GLOBAL MARKETS-Resurgent oil drags down U.S. stocks, dollar

Reuters: [2008-05-16 19:00:00]

(Recasts with U.S. markets, adds byline; changes dateline; previous LONDON)

* U.S. stocks drop as crude oil surges to fresh high

* Dollar tumbles on bearish consumer sentiment data

* European stocks rise as oil drives up energy shares

By Herbert Lash

NEW YORK, May 16 (Reuters) - Oil prices streaked toward $128 a barrel on Friday, knocking down U.S. stocks and the dollar, while a slump in U.S. consumer confidence to a 28-year low added to worries about the health of the U.S. economy.

Gold, a traditional hedge against inflation, broke above a key psychological level of $900 per ounce for the first time in three weeks as crude oil surged to a record of $127.82.

U.S. Treasury debt prices rose on a renewed flight to safety bid in the aftermath of the surprisingly weak sentiment report, which revived fears U.S. consumer spending may sag sharply in coming months.

The dollar extended losses against the euro and gave up gains versus the yen after the Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence fell in May to 59.5, its lowest level since June 1980 -- the height of U.S. stagflation.

Crude oil prices jumped after Goldman Sachs <GS.N>, the most active investment bank in energy markets, sharply raised its forecast for the average price of oil during the second half of the year to $141 a barrel, from a prior forecast of $107.

The rise in oil prices drove up shares of energy companies, helping European stock markets close higher.

The Goldman Sachs oil forecast, however, overshadowed early optimism in U.S. equity markets following a surprisingly strong 8.2 percent rise in U.S. housing starts in April and as applications for building permits rose for the first time in five months, government data showed.

"The obvious impact of higher energy prices is that consumers have less disposable income and their confidence drops," said Joe Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania. "Businesses have to pass along the costs and the result is an inflationary effect."

After midday, U.S. benchmark indexes were down. The Dow Jones industrial average <.DJI> was down 52.76 points, or 0.41 percent, at 12,939.90. The Standard & Poor's 500 Index <.SPX> was down 3.43 points, or 0.24 percent, at 1,420.14. The Nasdaq Composite Index <.IXIC> was down 13.36 points, or 0.53 percent, at 2,520.37.

Financial shares, led by Citigroup <C.N>, Bank of America <BAC.N> and Wells Fargo <WFC.N>, were the biggest sector drag on the benchmark Standard & Poor's 500 Index. Citigroup shares fell 1.9 percent, while Bank of America fell 1.4 percent, and Wells Fargo shed 2.1 percent.

Surging oil prices boosted shares of energy companies such as Exxon Mobil <XOM.N> , which were the top boost to the S&P 500. The S&P index of energy shares <.GSPE> was up 1.5 percent, while the S&P financial index <.GSPF> fell 1.4 percent.

European shares rose, fed by a rally in energy stocks, although banks came under pressure and the weak reading in U.S. consumer sentiment knocked the market back from session peaks.

The FTSEurofirst 300 <.FTEU3> index of top European shares closed up 0.4 percent to 1,365.2 points, after earlier rising by as much as 1.2 percent to a four-month high.

Shares of Total, BP and Royal Dutch Shell rose by 1.5 percent to 2.5 percent, making them the three largest positive influences on the broader market.

Pharmaceuticals put on a strong performance, with France's Sanofi-Aventis rising 2.2 percent after investors welcomed positive clinical trial results for its heart drug Multaq.

A decline in bank stocks took some of the luster off the index, particularly as U.S. stocks slipped into the red.

DOLLAR DOWN ON FEARS OF WEAK ECONOMY

The dollar fell as a plunge in U.S. consumer confidence raised the possibility of a economic contraction in the second quarter growth and trimmed the chances of the Federal Reserve leaving interest rates steady in June.

The dollar fell against major currencies, with the U.S. Dollar Index <.DXY> down 0.72 percent at 72.808.

The euro <EUR=> rose 0.86 percent at $1.5576, and against the yen, the dollar <JPY=> fell 0.74 percent at 103.91.

U.S. Treasury debt prices turned higher and Euro zone government bond futures extended gains after the reading of U.S. consumer sentiment.

The benchmark 10-year U.S. Treasury note <US10YT=RR> rose 5/32 to yield 3.80 percent. The 2-year U.S. Treasury note <US2YT=RR> was about break-even, yielding 2.43 percent. The 30-year U.S. Treasury bond <US30YT=RR> rose 16/32 to yield 4.52 percent.

The June Bund future <FGBLM8> rose to 113.50 from 113.40 before release of the data. Two-year yields were little changed at 4.005 percent <EU2YT=RR>.

Gold jumped to its highest in 3 weeks, with spot gold prices <XAU=> up $19.50, or 2.21 percent, to $899.95 after midday.

U.S. crude <CLc1> traded at $126.450, a rise of $2.38. In London, Brent <LCOc1> was $2.32 higher at $124.95, after hitting a high of $126.34.

Most stock markets across Asia rose modestly. Tokyo slipped and Sydney surged back to closing levels last seen in January, as top miner BHP Billiton <BHP.AX> jumped, propelled by speculation of Chinese interest in the firm.

Japan's Nikkei average <.N225> retreated 0.2 percent while MSCI's index of other Asian stock markets <.MIAPJ0000PUS> rose 1.2 percent. Sydney's benchmark S&P/ASX 200 index <.AXJO> gained 0.7 percent. (Reporting by Kristina Cooke, John Parry, Lucia Mutikani and Nick Olivari in New York and Amanda Cooper in London; Editing by Leslie Adler) ((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters Messaging: herb.lash.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available

for: * 3000 Xtra: visit

http://topnews.session.rservices.com

* BridgeStation: view story .134

For more information on Top News:

http://topnews.reuters.com)) Keywords: MARKETS GLOBAL

GLOBAL MARKETS-World stocks power to 4-month peak

Reuters: [2008-05-16 13:38:00]

(Adds Wall Street outlook)

By Natsuko Waki

LONDON, May 16 (Reuters) - World stocks powered to a fresh four-month peak on Friday, driven by technology and oil shares, while diverging growth outlooks between the United States and elsewhere weighed on the dollar.

Data from Japan showed the economy unexpectedly picked up pace, growing 0.8 percent in the first quarter as exports weathered a U.S. downturn. This followed Thursday's data which offered forecast-beating growth in the euro zone.

These economies could still follow the United States into a slowdown, but evidence that growth is more than holding up, which helped boost investor risk appetite.

"Europe is not going to be anywhere as badly affected with a continuing slowdown in the real economy as the U.S. is," said Adam Myers, market strategist at Credit Suisse.

"Europe will slow down but its slowdown is not going to have the same impact on financial markets and lending and therefore consumers than it will in the U.S."

The FTSEurofirst 300 index <.FTEU3> rose 1 percent while MSCI's main world equity index <.MIWD00000PUS> rose 0.5 percent to its highest since January.

The MSCI index is a whisker away from a 2008 high set in January and on track to recoup all of the losses made since the end of last year.

Reflecting an increasingly risk-friendly environment, the Volatility Index <.VIX>, a key gauge of fear which measures projected stock market volatility through the S&P, hit 16.08 on Thursday, its lowest since October, having shot up as high as 37.57 in January.

In Europe, technology shares <.SX8P> were the best performing sector, helped by Thursday's gains in chip maker Intel Corp <INTC.O> after Lehman Brothers raised its price target on the stock. Oil shares also rose as oil resumed its march towards record peak.

Financial stocks rose, with a focus on a report by the Financial Times that Britain's biggest banks are preparing to swap between 80-90 billion pounds of mortgage-backed assets for Bank of England Treasury bills.

The amount is nearly twice what the central bank envisaged when it unveiled the scheme to unblock the frozen bank-lending market.

U.S. stock futures rose 0.3 percent <SPc1>, indicating a firmer open on Wall Street. Yahoo <YHOO.O> <YHOO.F> was trading higher in Europe after the firm said late on Thursday it had struck an advertising partnership deal with WPP Group <WPP.L> that will let WPP buy ads on Yahoo's online ad exchange.

DIVERGING GROWTH OUTLOOKS

Signs of diverging economic outlooks in G3 (United States, Japan and euro zone) countries weighed on the dollar earlier, before the U.S. currency recouped its losses to stand steady on the day <.DXY>.

The euro rose 0.2 percent at $1.5477 <EUR=>.

"The general background remains pro-risk," Steven Pearson, chief strategist at Bank of Scotland, in a note to clients.

"Although the strength in Japan's GDP report is a mirage..., the idea that the less leveraged advanced economies and the emerging world are de-coupling further from leveraged Anglo-Saxon style economies could well take root from here."

Earlier, data showed Hong Kong's economic performance surprised on the upside, growing 1.8 percent in the first quarter for annual growth of 7.1 percent.

Emerging sovereign spreads <11EMJ> tightened 2 basis points while emerging stocks <.MSCIEF> were up more than 1 percent.

The June Bund future <FGBLM8> rose 13 ticks.

U.S. light crude <CLc1> rose 1.7 percent to $126.22 a barrel, edging towards this week's record high near $127.

Gold <XAU=> rose to $885.30 an ounce, tracking oil higher. (Additional reporting by Toni Vorobyova; Editing by Ron Askew)

((natsuko.waki@reuters.com, +44 207 542 6721, Reuters Messaging: natsuko.waki.reuters.com@reuters.net))

Keywords: MARKETS GLOBAL

GLOBAL MARKETS-World stocks power to 4-month high

Reuters: [2008-05-16 10:17:00]

By Natsuko Waki

LONDON, May 16 (Reuters) - World stocks powered to a fresh four-month peak on Friday after firmer technology shares boosted Wall Street, while this week's stronger-than-expected growth data in the euro zone and Japan boosted the euro and the yen.

Financial stocks rose, with a focus on a report by the Financial Times that Britain's biggest banks are preparing to swap between 80-90 billion pounds of mortgage-backed assets for Bank of England Treasury bills.

The amount is nearly twice what the central bank envisaged when it unveiled the scheme to unblock the frozen bank-lending market.

Data from Japan showed the economy unexpectedly picked up pace, growing 0.8 percent in the first quarter as exports weathered a U.S. downturn. This followed Thursday's data which offered forecast-beating growth in the euro zone.

These economies could still follow the United States into a slowdown, but evidence that growth is more than holding up, combined with signs of solid corporate profits especially in the United States, helped boost investor risk appetite.

"Confidence does seem to be coming from the suggestion that the U.S. economy has ridden out the storm and may well be building a base from which to spring higher," said Neil Parker, strategist at Royal Bank of Scotland.

The FTSEurofirst 300 index <.FTEU3> rose 0.4 percent while MSCI's main world equity index <.MIWD00000PUS> rose a third of a percent to its highest since January.

Reflecting an increasingly risk-friendly environment, the Volatility Index <.VIX>, a key gauge of fear which measures projected stock market volatility through the S&P, hit 16.08, its lowest since October, having shot up as high as 37.57 in January.

In Europe, technology shares <.SX8P> were one of the best-performing sectors, helped by a battle to control Yahoo <YHOO.O> and gains in chip maker Intel Corp <INTC.O> after Lehman Brothers raised its price target on the stock.

DIVERGING GROWTH OUTLOOKS

Signs of diverging economic outlooks in G3 (United States, Japan and euro zone) countries weighed on the dollar, which fell 0.3 percent against six major currencies <.DXY>.

The euro rose a third of a percent to $1.5499 <EUR=> while the yen rose half a percent to 104.22 per dollar <JPY=>.

"The general background remains pro-risk," Steven Pearson, chief strategist at Bank of Scotland, in a note to clients.

"Although the strength in Japan's GDP report is a mirage..., the idea that the less leveraged advanced economies and the emerging world are de-coupling further from leveraged Anglo-Saxon style economies could well take root from here."

Emerging sovereign spreads <11EMJ> were unchanged while emerging stocks <.MSCIEF> were up 0.7 percent.

The June Bund future <FGBLM8> rose 30 ticks.

U.S. light crude <CLc1> rose 0.3 percent to $124.47 a barrel, edging towards this week's record high near $127.

Gold <XAU=> was largely steady at $880.90 an ounce.

(Additional reporting by Rebekah Curtis; Editing by Gerrard Raven)

((natsuko.waki@reuters.com, +44 207 542 6721, Reuters Messaging: natsuko.waki.reuters.com@reuters.net))

Keywords: MARKETS GLOBAL