GLOBAL MARKETS-Iraq unrest drives up oil, shares edge higher

Fri Jun 13, 2014 3:07pm EDT

(Adds oil settlement prices)
    * Iraq fighting boosts oil, damps global equity markets
    * Intel's outlook drives tech sector, Wall Street higher
    * Dollar firms as Iraq conflict drives safe-haven buying

    By David Gaffen and Herbert Lash
    NEW YORK, June 13 (Reuters) - Escalating violence in Iraq
drove crude oil prices to nine-month highs on Friday while
damping the appetite for risk, even as bullish news from the
U.S. tech sector lifted shares on Wall Street and helped buoy
stocks in global equity markets.
    Brent crude edged above $113 a barrel, up more than $4 this
week, on concerns that an insurgency in Iraq could trigger civil
war and eventually crimp oil exports.
    Iraq's most senior Shi'ite cleric urged his followers to
take up arms to defend themselves against advancing Sunni
militants, escalating a conflict that threatens civil war and a
possible break-up of the country. 
    "The market in general is trying to assess the risks on
Iraq," said Olivier Jakob at Petromatrix consultancy.    
    The dollar strengthened against a basket of major currencies
for the first time in three sessions as the Iraqi violence
triggered a safety bid for the U.S. currency. Higher U.S. bond
yields also underpinned the move. 
    European stocks closed slightly lower but shares on Wall
Street rose after Intel Corp raised its full-year
revenue outlook, citing stronger-than-expected demand for
personal computers used by businesses. 
    Intel added the most gains to the three major indices on
Wall Street, and its shares were up 6.62 percent at $29.81.
    MSCI's all-country world equity index rose
0.04 percent, lifted by Wall Street and Canada's Bay Street
.
    The FTSEurofirst 300 index of top European shares
closed down 0.2 percent at 1,389.83, moving further away from
this week's 6-1/2-year high.
    The Dow Jones industrial average rose 34.75 points,
or 0.21 percent, at 16,768.94. The Standard & Poor's 500 Index
 was up 5.36 points, or 0.28 percent, at 1,935.47. The
Nasdaq Composite Index was up 12.56 points, or 0.29
percent, at 4,310.19. 
    "The market isn't cheap, but it isn't crazy expensive and
the sectors that are looking better are cyclical in nature,"
said Michael Mullaney, chief investment officer at Fiduciary
Trust Co in Boston. "Tech has been doing well from a price
return standpoint, and that should continue." 
    Brent settled 39 cents higher at $113.41 per barrel,
off a peak of $114.69, its highest since September.
    U.S. crude rose 38 cents to settle at $106.91, off a
high of $107.68 hit earlier, also a nine-month peak.
    The U.S. dollar index, which measures the dollar
against a basket of six major currencies, rose 0.07 percent at
80.636. The euro slid 0.13 percent against the dollar at
$1.3534, while the dollar rose 0.32 percent against the yen
 at 102.03.
    Sterling surged after the Bank of England hinted at an
interest rate rise this year. 
    Despite the decline in riskier assets, benchmark U.S. bond
prices fell, pushing yields higher. U.S. 10-year notes
 fell 5/32 in price to yield 2.6042 percent.

 (Additional reporting by Anirban Nag, Julia Payne and
Christopher Johnson; Editing by Nick Zieminski and Dan Grebler)