(Adds oil settlement prices)
* Battle over debt vs equities keeps markets in check
* Dollar tumbles to 3-1/2-month low vs yen as debt yields
* Brent retreats below $110 on Libya violence, fall in
By Herbert Lash
NEW YORK, May 19 Global equity markets edged
higher on Monday as Wall Street rose on Internet and healthcare
stocks, while declining yields on government debt also initially
provided U.S. equities a lift.
Pfizer's failed bid for AstraZeneca weighed on European
shares earlier in the session, with the British drugmaker the
biggest drag on the FTSE 100 in London and the
pan-regional FTSEurofirst 300 index.
But Pfizer rebounded on the failed bid. At one point, it was
the second-largest contributor to gains in the S&P 500 index,
after Apple. Pfizer rose 0.8 percent at $29.355 a share, while
AstraZeneca closed down 11.1 percent in London.
Treasuries at first rallied. Yields on the benchmark 10-year
U.S. Treasury note fell to 2.51 percent, near lows last seen in
October, but later they traded higher at 2.5338 percent.
Analysts had expected interest rates to rise, but with rates
touching seven-month lows, the bond rally has helped U.S. stocks
and kept at bay a long-expected correction.
"The big story is the bond market, that is the one thing
that stands out like a sore thumb," said Stephen Massocca,
managing director at Wedbush Equity Management LLC in San
"If we did not get this big decrease in rates, the (stock)
market would've corrected," Massocca said. "It is maybe
preventing a decline, of which we are a little overdue in the
The Dow Jones industrial average rose 16 points, or
0.1 percent, to 16,507.31. The S&P 500 gained 6.41
points, or 0.34 percent, to 1,884.27 and the Nasdaq Composite
added 32.237 points, or 0.79 percent, to 4,122.825.
"The listlessness in the market shows the struggle
investors are having right now: valuations are full but not
stretched, and there's a lack of decisive evidence that the
economy will kick into higher growth and justify these
valuations," said Mark Luschini, chief investment strategist at
Janney Montgomery Scott in Philadelphia.
"Equities remain a better choice than bonds or cash this
year, but on a near-term basis they might succumb to gravity."
MSCI's all-world equity index, which tracks
shares in 45 nations, rose 0.1 percent to 415.22.
The pan-European FTSEurofirst 300 index, which last
week hit a 6-year high of 1,372.81 points, closed down 0.19
percent at 1,358.91 points.
Benchmark 10-year U.S. Treasury notes were last
up 1/32 in price to yield 2.5142 percent.
The dollar fell as low as 101.11 yen, the weakest
since early February. It was last at 101.33, down 0.16 percent.
The euro gained 0.15 percent on Monday to $1.3712.
U.S. oil prices rose near one-month high as a weak dollar
prompted buying, while Brent prices fell as concerns about
China's slowing economy outweighed the impact of low Libyan
Brent settled down 38 cents to $109.37 a barrel.
U.S. crude rose 59 cents to settle at $102.93.
(Additional reporting by Natsuko Waki in London, reporting by
Herbert Lash; Editing by Chris Reese, Chizu Nomiyama and Nick