U.S. stocks fall on dismal data

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks fell on Friday after weak U.S. housing and consumer confidence reports added to growing worries about a widening slowdown, while oil prices rose on growing expectations OPEC will cut crude supplies.

Trading was volatile on Wall Street and other financial markets as a wave of forced selling pushed security prices wildly up and down in what has become a daily occurrence.

The U.S. dollar rebounded against the yen in signs of greater risk appetite but gold dropped after the dollar rally triggered heavy liquidations by commodity funds.

The Dow capped its best weekly gain in five years and the broader S&P 500 had its best week since February after a disastrous three weeks that had knocked U.S. stocks deeply into bear territory.

Oil jumped 2.9 percent, spurred by a broader rise across many financial markets and expectations that the Organisation of Petroleum Exporting Countries could cut output at an emergency meeting next week.

U.S. crude settled up $2 to $71.85 a barrel, while London Brent crude gained $1.76 to settle at $69.60 a barrel.

The rise in oil prices pushed energy shares in Europe sharply higher, driving up markets across the continent.

U.S. stocks had risen solidly earlier on reassuring results by technology leaders Google and IBM, as well as bargain-hunting.