* Dollar gains broadly; oil remains weak
* Empire State manufacturing way below expectations
* U.S. stocks rebound from sluggish start
(Adds U.S. market open, changes byline, dateline from previous
LONDON)
By Chuck Mikolajczak
NEW YORK, Aug 17 (Reuters) - World equity indexes gained
modestly on Monday after a rout last week, with rosy U.S.
housing data helping Wall Street shrug off a weak manufacturing
report, while the prospect of higher U.S. interest rates lifted
the dollar for a third day.
U.S. equities rebounded from a lower open as a report showed
that U.S. homebuilder sentiment rose in August to its highest
level in nearly a decade. ID:nL3N10S4N5
Earlier, stocks had dropped as Empire State data showed
August manufacturing activity in New York was at its weakest in
years. ID:nL1N10S0J8
"Empire State (data) was horrendous compared to what the
expectations were, but Empire State is also a very regional
number and a very volatile number," said Ken Polcari, director
of the NYSE floor division at O'Neil Securities in New York.
"They are all looking to Wednesday's FOMC meeting minutes
and what it is going to mean, what are they going to say."
Minutes from the U.S. Federal Reserve's most recent
policymaking meeting are due to be released on Wednesday.
Investors await that document for clues on how soon the Fed may
hike rates for the first time in nearly ten years, with many
analysts expecting such a move by the end of the year.
The expectations for an impending rate hike helped the
dollar rise, as did reassurance from China fixing its yuan
exchange rate slightly higher for a second day running.
ID:nL5N10S193
Housing stocks advanced after the NAHB/Wells Fargo Housing
Market index showed U.S. homebuilder sentiment rose in August to
its highest since a matching reading almost a decade ago. The
PHLX housing sector index .HGX gained 0.8 percent.
REBOUND
European stocks bounced from last week's heavy selloff of
nearly 3 percent, with the pan-European FTSEurofirst 300 index
.FTEU3 up 0.4 percent.
MSCI's all-country world stock index .MIWD00000PUS edged
down 0.01 percent.
Crude oil remained weak, with U.S. crude CLc1 down 0.5
percent at $42.49, while Brent LCOc1 down 0.1 percent to
$49.13 after data indicated Japan's economy contracted in the
second quarter amid oversupply concerns. ID:nL3N10S05C
The Dow Jones industrial average .DJI rose 29.6 points, or
0.17 percent, to 17,507, the S&P 500 .SPX gained 4.23 points,
or 0.2 percent, to 2,095.77 and the Nasdaq Composite .IXIC
added 16.57 points, or 0.33 percent, to 5,064.80.
Germany's DAX slipped 0.2 percent .GDAXI and France's CAC
40 climbed 0.8 percent .FCHI . Britain's FTSE 100 .FTSE , was
0.2 percent higher.
The yuan fell more than 4 percent at one point last week,
pulling down riskier assets including emerging currencies
globally on fears of a currency war. But China slowed the pace
of the currency's drop, and on Monday fixed it higher for the
second day in a row. ID:nL3N10S1EH
Benchmark 10-year notes US10YT=RR were last up 10/32 in
price to yield 2.163 percent from 2.198 late on Friday.
ID:nL1N10S0M7