GLOBAL MARKETS-World stocks gains, Brent slips on Libya hopes

Mon Aug 22, 2011 11:06am EDT

  
 * U.S. stocks rally; world stocks higher
 * Brent crude oil falls on hopes for end to Libya conflict
 * Gold sets record high again near $1,900 an ounce
 (Updates, adds details)
 NEW YORK, Aug 22 (Reuters) - Stocks rose above recent
11-month lows and Brent crude oil fell on Monday as Libya's
civil war appeared to be nearing an end.
 Gold prices rose, but were off record highs near $1,900 an
ounce earlier in the day, and U.S. Treasuries fell.
 The more than 1 percent bounce in U.S. stocks follows four
weeks of losses. Gains were broad-based, with shares of
Caterpillar (CAT.N) up 2.4 percent at $81.87.
 Persistent worries that the sovereign debt crisis in euro
zone peripheral countries may spread to the larger economies in
the region have kept investors on edge.
 The cost for euro zone banks to borrow money from one
another rose again on Monday, heading back toward their highest
levels since late 2008, as U.S. banks remained wary of lending
to European counterparts in the face of the intractable debt
crisis. For details, see [ID:nL5E7JM1B5]
 Brent crude fell by more than a dollar as investors
anticipated the resumption of oil exports from OPEC-member
Libya. U.S. crude oil CLc1, however, rose less than $1 a
barrel.
 "Brent is taking more of a battering but that's only to be
expected," said Christopher Bellew, a trader at Jefferies
Bache. "The divergence is just another graphic example of the
dislocation between (U.S. crude) WTI and Brent."
 The potential for a restart of Libyan oil flows into the
market if the Gaddafi regime collapses weighed on the benchmark
oil price. If Libyan production comes back it would ease
gasoline prices, potentially boosting economies worldwide as
disposable income increased.
 Libyan government tanks and snipers put up scattered
resistance in Tripoli after rebels swept into the heart of the
capital, cheered on by crowds hailing the end of Muammar
Gaddafi's 42 years in power. [ID:nL5E7JL0LD]
 On Wall Street, the Dow Jones industrial average .DJI was
up 150.19 points, or 1.39 percent, at 10,967.84. The Standard &
Poor's 500 Index .SPX was up 16.00 points, or 1.42 percent,
at 1,139.53. The Nasdaq Composite Index .IXIC was up 41.16
points, or 1.76 percent, at 2,383.00.
 The benchmark MSCI world equity index .MIWD00000PUS
gained 0.8 percent on Monday but has fallen for five weeks in a
row and looks to be heading for its worst monthly performance
since October 2008, when markets were reeling after the
collapse of Lehman Brothers. European stocks .FTEU3 rose 1.6
percent.
 Some investors are hoping for the Federal Reserve to
announce a new form of stimulus, not long after pleading to
keep interest rates "exceptionally low... at least through
mid-2013."
 "This month has been about a lack of confidence, and if
(Fed Chairman Ben) Bernanke announces the injection of
additional stimulus, that will give the markets confidence that
something is being done, which should at least decrease some of
the volatility we've been seeing," said Tim Speiss, head of
personal wealth advisors at EisnerAmper in New York.
 Additional bond purchases by the Fed could help reflate
asset prices, but many view the chances of a third round of
quantitative easing as limited and expect the Fed to take
gradual measures to boost the economy.
 The speculation caused the dollar to slip. The U.S.
currency .DXY was down 0.1 percent against a basket of major
currencies. The euro EUR= traded 0.2 percent higher at
$1.4424.
The benchmark 10-year note US10YT=RR was last down 17/32
in price, yielding 2.12 percent versus Friday's close of 2.06
percent.
 In commodities, Brent crude LCOc1 was down $1.41 to
$107.21.
 Gold hit a third consecutive all-time high after staging
its biggest weekly gain in 2-1/2 years last week. Spot gold
XAU= was up 0.7 percent at $1,871.79 an ounce.
 (Additional reporting by Ryan Vlastelica in New York and
Claire Milhench in London)
(Reporting by Caroline Valetkevitch and David Gaffen, ; Editing
by Theodore d'Afflisio)







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