* Global equity markets continue to climb
* Yen gains on minister's comments, rise seen temporary
* Gold gains after longest losing streak in four years
* Oil rebounds, rises above $105 a barrel
(Updates prices, adds close of European stocks)
By Herbert Lash
NEW YORK, May 20 Global equity markets resumed
this year's rally on Monday, driven higher by a flurry of merger
and acquisition activity, while a recent tumble in the yen
against the dollar halted after Japan's economy minister
suggested the currency might have weakened enough.
Despite major American and European stock indices being up
double digits - the U.S. benchmark S&P 500 index is almost 17
percent higher so far this year - investors still see better
returns ahead in equities than elsewhere.
Deals such as Yahoo's $1.1 billion bid for Tumblr
indicate that companies continue to search for growth through
acquisitions despite record high share prices, a bullish sign
for stocks. Yahoo was up 1.21 percent at $26.84.
In another deal, generic drugmaker Actavis Inc.,
itself the subject of takeover speculation, said it would buy
specialty pharmaceutical company Warner Chilcott Plc
for $5 billion in stock.
Actavis rose 2.7 percent to $128.89, while Warner Chilcott
gained 3.33 percent to $19.85.
"We got a lot of merger announcements this morning. It means
there's a lot of appetite for equities and that's good for the
market," said Giri Cherukuri, head trader at OakBrook
Investments LLC in Lisle, Illinois.
"Stocks are not too over-valued and the economy is getting
better," he said. "As long as the economy continues to improve,
the market should be able to maintain these levels."
The Dow Jones industrial average was up 16.48 points,
or 0.11 percent, at 15,370.88. The Standard & Poor's 500 Index
was up 2.64 points, or 0.16 percent, at 1,670.11. The
Nasdaq Composite Index was up 2.01 points, or 0.06
percent, at 3,500.97.
MSCI's all-country world equity index rose
0.51 percent to its highest since June 2008.
Britain's benchmark FTSE 100 index rose to its best
closing level since late 2000, while the FTSEurofirst-300 index
of leading European shares rose 0.31 percent to close
European shares hit five-year highs, boosted by strength in
German stocks and a travel sector lifted by a surge in Ryanair
after it reported better-than-expected earnings for the
past year. Ryanair rose 6.87 percent to a record 6.765.
The Japanese economy minister, Akira Amari, said the yen's
excessive strength had largely corrected and further weakness
could damage Japan's economy.
Analysts, however, said any sharp dip in the dollar against
the yen was a buying opportunity as Tokyo was committed to
easier monetary policy. While the dollar fell sharply on Amari's
comments and remained down on the day, it was off the session
The dollar was last 0.44 percent lower at 102.47 yen,
having hit a low of 102.19. Last Friday, the dollar reached a
high of 103.30 yen.
The euro gained 0.5 percent against the dollar to
Gold had been on track for its longest run of losses since
March 2009, weighed by speculation that the Federal Reserve
might rein in its economic stimulus program.
Investors have been dumping gold, which is down about 20
percent this year, while stocks and the dollar have risen on an
improving global economic outlook. Gold-backed exchange-traded
funds have had massive outflows in recent months.
Spot gold hit a low of $1,338.95 an ounce on Monday,
its weakest since April 16, but later rebounded, rising $25.20
to $1,383.34 an ounce.
The beginning of the end of the Fed's massive bond-buying
program might come sooner than many investors think if recent
gains in the U.S. labor market do not prove fleeting.
U.S. government debt prices slipped after an early rebound
from last week's sell-off as the dollar weakened against the
yen. The benchmark 10-year U.S. Treasury note was
unchanged in price to yield 1.9524 percent.
Brent crude traded near break-even, weighed by ample
supplies, weaker demand for fuel and a strong dollar.
Brent crude for July was up 40 cents at $105.04 a
barrel. U.S. crude rose 79 cents to $96.81.
(Reporting by Herbert Lash; Editing by Dan Grebler)