GLOBAL MARKETS-U.S. stocks and bonds rise, but dollar weak

NEW YORK, Sept 21 (Reuters) - U.S. stocks resumed their climb on Friday after a one-day break, as earnings from Oracle Corp. (ORCL.O: Quote, Profile, Research) topped analysts' estimates, while yield-hungry bargain hunters snapped up U.S. Treasury bonds.

The dollar took a breather from the severe selling pressure the currency has faced since the sharp interest-rate cut by the U.S. Federal Reserve on Tuesday, but only after dropping to a new low.

The euro was little changed on the day at $1.4084 , after weaker-than-expected euro-zone manufacturing data for September dragged the currency from a record high of $1.4120 hit overnight, according to Reuters data.

The dollar fell to a fresh 15-year low against a basket of currencies (.DXY: Quote, Profile, Research) at 78.398 earlier in the day and then recovered to 78.588, up 0.01 percent. The U.S. Dollar Index is down 1.3 percent for the week.

But against the yen, the dollar gained 0.67 percent to 115.41 from 114.64 yen late on Thursday.

The Fed moved aggressively this week by slashing short-term U.S. interest rates half a percentage point in an attempt to restore confidence in the financial system after a severe freezing of mortgage and credit markets, which has rattled global financial markets.

Near the close, the Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 55.52 points, or 0.40 percent, at 13,822.22. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was up 6.88 points, or 0.45 percent, at 1,525.63. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 15.54 points, or 0.59 percent, at 2,669.83.

Friday marks the expiration of equity derivative contracts in the quarterly event known as "quadruple witching." Volume was up as investors exercised their derivative positions or rolled them forward at the last minute.

"When you get close to options expiration, you probably have people covering (positions) who normally wouldn't," said Rick Campagna, portfolio manager at Provident Investment Council in Pasadena, California.

"Very good numbers" in earnings results have also been a factor, he said. "I think earnings will be good for the third quarter."

EARNINGS SAVE THE DAY

Late Friday, Oracle's shares were up 5.04 percent at $22.10 on Nasdaq after the company reported earnings and revenue that topped analysts' estimates after Thursday's closing bell. Citigroup and UBS raised their price targets on the stock of the world's third-largest software maker.

Shares of Texas Instruments Inc (TXN.N: Quote, Profile, Research) rose 2.4 percent to $36.63 on the New York Stock Exchange after it said its board had approved an additional $5 billion stock buyback, and the company plans to raise its cash dividend by 25 percent.

In overseas stock markets, though, Japan's Nikkei average (.N225: Quote, Profile, Research) declined 0.6 percent after the yen's gain against the dollar prompted investors to sell shares of exporters such as Canon Inc (7751.T: Quote, Profile, Research). The Nikkei dropped 101.18 points to 16,312.61.

The FTSEurofirst 300 index (.FTEU3: Quote, Profile, Research) gained 0.47 percent, or 7.21 points, to finish at 1,546.28, after Goldman Sachs upgraded the auto sector. Merger and acquisition talk also whetted investors' appetite for stocks.

OIL AND GOLD OFF HIGHS, BONDS SOAR Oil prices slipped but held above $81 a barrel on Friday, a day after hitting a record above $84 as a tropical depression forced the shutdown of output in the Gulf of Mexico.

U.S. crude oil for November delivery (CLc1: Quote, Profile, Research) dipped 16 cents to settle at $81.62 a barrel. The October U.S. crude oil contract expired on Thursday after it hit a record for the seventh straight session at $84.10 in late electronic trading.

Oil has traded above $80 for the past week, despite OPEC's decision last week to raise output in November. Among the factors keeping oil prices high are thinning U.S. inventories, a weakening dollar, the U.S. interest-rate cut that eased fears of a recession and concerns that storms could disrupt supply.

Spot gold prices was quoted at $732.50/733.30 in New York late Friday, down from late Thursday's level at $734.20/735.00. But that followed gold's surge to $739 an ounce in Europe on Friday -- its highest since January 1980.

The Reuters/Jefferies CRB Index (.CRB: Quote, Profile, Research) was down 0.17 of apoint, or 0.05 percent, at 333.15.

The skyrocketing price of oil and gold's jump to 27-year highs have begun to increase fears of inflation, particularly in the United States, where a weak dollar also makes foreign-made goods more expensive.

But U.S. Treasury bond prices, which have been battered this week by those inflationary fears, found bargain hunters on Friday, who were tempted by the jump in yields during the recent sell-off. Bond prices move inversely to yields.

The benchmark 10-year U.S. Treasury note was up 16/32 in price, with the yield at 4.63 percent, down from 4.70 percent late on Thursday. The 2-year U.S. Treasury note was up 3/32, with the yield at 4.06 percent.

Without a doubt, the most popular maturity of the day was the long end of the Treasury yield curve.

The 30-year U.S. Treasury bond was up more than a full point, with its price rising 1-5/32 to 101-20/32, while its yield fell to 4.90 percent from 4.97 percent late on Thursday. (Additional reporting by Caroline Valetkevitch, John Parry, Nick Olivari, Gene Ramos and Frank Tang in New York, Jeremy Gaunt and Sitaraman Shankar in London and Elaine Lies in Tokyo )