* European stocks flat, Russian stock take another heavy hit
* Brent oil extends gains, on track for weekly rise
(Adds opening of U.S. markets, byline, dateline; previous
By Herbert Lash
NEW YORK, July 18 U.S. stocks rebounded and
European markets recovered a bit on Friday but the euro dipped
below $1.35 for first time since February after a Malaysian
airliner was downed in eastern Ukraine and Israel stepped up a
ground assault in Gaza.
German Bund yields fell to near record lows as investors
bought assets perceived as safe havens after Thursday's crash, a
potentially pivotal moment in the worst crisis between Russia
and the West since the Cold War.
European shares underwent more selling after
falling heavily on Thursday, but stocks on Wall Street rose
after the S&P 500 suffered its worst decline since April 10.
MSCI's 45-country all-country world index
rose 0.27 percent, while the pan-European FTSEurofirst 300 index
was flat at 1,362.82 after being down earlier.
The Dow Jones industrial average rose 47.69 points,
or 0.28 percent, to 17,024.5. The S&P 500 gained 8.19
points, or 0.42 percent, to 1,966.31 and the Nasdaq Composite
added 33.182 points, or 0.76 percent, to 4,396.628.
"It seems counterintuitive given the ruthlessness with which
the market sold off yesterday, but in the broader context the
markets are generating a lot of attractive themes," said Peter
Kenny, chief market strategist at Clearpool Group in New York,
citing a growing U.S. economy and corporate earnings.
World leaders demanded an international investigation into
the downing of the Malaysian Airlines plane with 298 people on
board over eastern Ukraine. Kiev and Moscow blamed each other
for a tragedy that stoked tensions between Russia and the West.
Russian markets took the heaviest hit. Dollar-traded stocks
in Moscow were down another 1.75 percent to put their
losses for the week at about 8 percent. The rouble
recovered almost half a percent on the day but was heading for
its biggest weekly loss in more than a year.
Israel announced the start of a Gaza ground campaign on
Thursday after 10 days of aerial and naval bombardments failed
to stop Palestinian rocket attacks.
Gold dipped as buyers cashed in on some of its 1.5
percent overnight jump. The Japanese yen and U.S.
government bonds - the safe haven investors usually
head for - both gave up some ground.
The dollar rose 0.21 percent to 101.36, while the euro fell
0.12 percent to $1.3510, after earlier briefly dipping below
Brent crude oil climbed to around $108 a barrel, extending
sharp gains on heightened geopolitical risk. Brent was
up 10 cents at $107.99 a barrel. U.S. crude fell 34 cents
to $102.85 a barrel.
(Additional reporting by Marc Jones in London, Reporting by
Herbert Lash; Editing by Nick Zieminski)