* Rebound in oil spurs relief in commodities
* Euro up against dollar after remarks by ECB's Coene
* World stocks slip, but U.S. shares rebound with oil (Adds fresh prices)
By Herbert Lash
NEW YORK, May 12 (Reuters) - Oil prices rebounded on Thursday, spurring relief across markets that a deep sell-off in commodities could be nearing an end and pulling riskier investments such as stocks off earlier lows.
The euro bounced off a six-week low against the dollar on as an ECB policy maker said April's interest rate rise was "certainly not" a one-off.
After suffering a steep fall, commodity prices later pared losses as oil briefly turned positive, and stocks on Wall Street also turned, hovering near break-even, and the Nasdaq tipped into positive territory.
"Commodities have had a great run in here -- we are just going to get some volatility going forward both in the up direction and down direction," said Wayne Schmidt, chief investment officer at Gradient Investments In St. Paul, Minnesota.
"This is kind of the way going forward where we have some price declines in commodities that take the market down with it," Schmidt said.
The Reuters-Jefferies CRB index <.CRB>, a global benchmark for commodities, had hit 3-1/2-month lows earlier as prices of raw materials fell sharply for a second straight session.
China raised bank reserve requirements once again to keep inflation in check amid signs of a slowing economy, while data showed euro zone industrial production fell unexpectedly in March, suggesting regional growth in the first quarter was less than expected. For details see:[ID:nL3E7GC2W4][ID:nLDE74B11S].
The U.S. economy also struggled to gain momentum early in the second quarter, with retail sales posting their smallest rise in nine months in April and wholesale prices increasing more than expected. [ID:nN12296928]
EURO GAINS AGAIN ON RATE OUTLOOK
The euro reversed earlier losses against the dollar after European Central Bank policymaker Luc Coene told Reuters that inflation risks in the euro zone have increased and price pressures are building [ID:nLDE74B0PZ].
The dollar index earlier had scaled a three-week high as a sell-off in commodities prompted an unwinding of dollar-funded bets on risky assets, the same reversal that pushed the euro to its multi week low against the greenback.
"Certainly the market is fixated on interest rate expectations and talk of a potential interest rate hike could give the euro a boost," said Gareth Sylvester, senior currency strategist at San Francisco-based Klarity FX.
The euro was last up 0.3 percent against the dollar at
$1.4240
But analysts emphasized the single currency remained under
pressure from euro zone periphery woes, as concerns increased
that Greece's debt burden may be unsustainable. The euro fell
to its lowest since March 24 against the yen in earlier trade
Crude oil, priced in dollars, fell almost 1.0 percent at one point, while gold and silver fell sharply for a second day and copper prices sagged to a five-month low as last week's slump in commodity prices resumed.
Investors sold stocks worldwide. The Thomson Reuters global stock index <.TRXFLDGLPU> declined 0.8 percent.
The Dow Jones industrial average <.DJI> was down 18.46 points, or 0.15 percent, at 12,611.57. The Standard & Poor's 500 Index <.SPX> was down 0.58 points, or 0.04 percent, at 1,341.50. The Nasdaq Composite Index <.IXIC> was up 3.94 points, or 0.14 percent, at 2,849.00.
In Europe, the FTSEurofirst 300 <.FTEU3> index of top regional shares was down 1.1 percent.
The commodities slump is "front and center" among drivers of the equities market, said Rick Meckler, president of LibertyView Capital Management in New York.
"Watching commodities' volatility increase is just making people aware the potential exists for equity volatility to pick up in a similar fashion," Meckler said.
Silver
Oil prices reversed course.
Brent crude