World stocks lifted by China data

The sunset is seen behind Isla refinery in Willemstad on the island of Curacao in this picture taken June 16, 2008.

NEW YORK (Reuters) - Stocks on major world markets rose on Tuesday as unexpectedly strong Chinese trade data reinforced optimism about the global economy, while oil prices gained on concerns U.S. flooding could hit Gulf Coast refinery operations.

The data also showed strong Chinese crude imports last month and added support to oil prices. The euro edged higher but fears and conflicting reports surrounding Greece's debt situation kept gains limited.

China posted a trade surplus in April that was nearly four times greater than expected, as exports hit a record and imports eased more than anticipated. The data illustrated the strength of China's economy even after its efforts to rein in inflation.

Optimism about the pace of economic recovery lifted U.S. and European equities. World stocks as measured by the MSCI stock index .MIWD00000PUS were up 0.9 percent.

"China's export numbers were very good," said Burt White, chief investment officer at LPL Financial in Boston. "That gave a shot in the arm to this market."

U.S. stocks rose for the third day in a row. But even as the data helped ease fears about a global slowdown, investors bought shares in more defensive sectors on the view that although the economic recovery was still in place, it is not accelerating as quickly as anticipated.

The Dow Jones industrial average .DJI added 75.68 points, or 0.60 percent, to 12,760.36. The Standard & Poor's 500 Index .SPX rose 10.87 points, or 0.81 percent, to 1,357.16. The Nasdaq Composite Index .IXIC gained 28.64 points, or 1.01 percent, to 2,871.89.

European shares climbed to a one-week closing high as mining stocks rose on the economic data and investors scooped up bank stocks on relief they will not suffer an imminent write-down on their Greek debt holdings.

"There is a view that if there is going to be a debt restructuring, it is going to be orderly," said Bob Parker, senior adviser at Credit Suisse.

The FTSEurofirst 300 .FTEU3 index of top European shares ended up 0.8 percent.

U.S. data showed the cost of imported products in the United States rose for a seventh straight month in April thanks to a weaker dollar, while another report showed high energy costs are forcing companies to raise prices.

Economists said these factors could be a problem for the Federal Reserve, which generally views the impact of higher food and commodity prices as being temporary.

In a positive sign, wholesale inventories rose in March suggesting some parts of the economy had substantial momentum at the end of the first quarter.

FLOOD FEARS

Crude oil prices traded higher as investors resumed a rally after last week's abrupt slide. While no refineries have been forced to cut operations yet, rising waters along the Mississippi River threatened to disrupt petroleum plants in Louisiana in the next two weeks.

Brent crude jumped $1.73 to $117.63, recovering from a low of $113.58 earlier in the session. U.S. crude settled up $1.33 at $103.88 a barrel in volatile action.

Oil prices have had a volatile week of trading, falling from over $114 a barrel -- the highest level since 2008 -- to $94 a barrel.

The euro steadied after falling sharply in recent days and was last up 0.1 percent at $1.4374.

Greece denied reports it was discussing a new 60 billion euro bailout with international lenders, and its borrowing costs rose amid fears it may have to restructure its debt without further EU help.

Doubts were raised by a German lawmaker whether Greece had met the conditions for getting the next tranche of aid under its existing deal but a source close to EU and IMF inspectors in Athens said it was too early for a decision.

"The only thing that seems 100 percent certain is that Greece remains mired in debt and that at least a good portion of that debt is at risk of not being repaid should the situation not change considerably, both in terms of the financial metrics and spending levels within the country itself," said Mark Frey, regional director at Wester Union Business Solutions in Victoria, British Columbia.

Comments from German Chancellor Angela Merkel -- Europe's reluctant paymaster -- on new aid for Greece were guarded. Merkel said she could only discuss further aid for Greece after EU and IMF officials report on implementation of its existing rescue plan. But she did not rule out additional funding for Athens or a possible fresh easing of terms on its bailout.

(Additional reporting by Rodrigo Campos and Wanfeng Zhou in New York, and Brian Gorman in London)