Global equities, oil rise amid concerns

NEW YORK: Global stocks and crude oil prices rose on Tuesday as investors, waiting to see if the Federal Reserve will move to aid a sputtering U.S economy, mostly shrugged off Italy's credit rating downgrade.

Risk aversion eased a bit even as economic news and data remained gloomy with German investor sentiment dropping to its lowest level in nearly three years and data showing US housing starts fell more than expected in August.

Brent crude bounced back from heavy losses the previous session as worries over the global economy were seen to have been factored into current prices.

North Sea Brent rose 62 cents to $109.76 a barrel.

Global equity markets rose, although stocks on Wall Street faltered as traders said Europe's debt crisis remained a strong headwind.

MSCI's all-country world equity index rose 0.3 percent, while the pan-European FTSEurofirst 300 gained 1.1 percent.

The Dow Jones industrial average was down 8.55 points, or 0.07 percent, at 11,392.46. The Standard & Poor's 500 Index was down 1.37 points, or 0.11 percent, at 1,202.72. The Nasdaq Composite Index was down 4.02 points, or 0.15 percent, at 2,608.81.

The euro fell to a New York session low against the dollar as investors remained concerned about European debt contagion following the downgrade of Italy's debt rating.

The euro was last down 0.1 percent at $1.36666 on electronic trading platform EBS.

Longer-dated US Treasury prices rose as US government debt reversed course on a revived bid for safe-havens.

The benchmark 10-year US Treasury note was up 4/32 in price to yield 1.94 percent.

Treasuries pared early losses after the government reported housing starts for both single-family and multi-family units dropped last month, suggesting the economy will not get help from residential construction anytime soon.

"The sense is that housing is still pretty weak. It won't improve until the labor market improves substantially and that doesn't look like that would happen this year," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Copyright Reuters, 2011