* GM IPO leads the charge for global stocks
* Government bond prices fall, Irish debt tensions ease
* Commodity prices rebound (Updates with European market close, adds comment)
By Daniel Bases
NEW YORK, Nov 18 (Reuters) - A blockbuster General Motors
Co
GM's return to the market less than 18 months after it emerged from government-funded bankruptcy raised $20.1 billion, the largest initial public offering in U.S. history, and provided a positive backdrop for investor sentiment. [ID:ID:nN18285952]
"This is bigger than just an IPO. It's an American icon coming back onstream and it is feeding optimism to the stock market," said Bernie McGinn, president of McGinn Investment Management in Alexandria, Virginia.
Commodity prices rose while U.S. government debt prices fell as credit tensions eased.
Manufacturing activity in the U.S. Mid-Atlantic region grew much more than expected, according to a survey from the Philadelphia Federal Reserve Bank. An improvement in the latest weekly initial claims for jobless benefits also helped strengthen the U.S. dollar. [ID:nN18248194].
The U.S. data helped erode the euro's gains as uncertainty about the Irish crisis ebbed after Dublin agreed to work with a European Union-International Monetary Fund mission on steps to shore up its shattered banking sector. [ID:nLDE6AH0HV] [ID:nLDE68T0MG]
But analysts remained skeptical that any rebound in risk appetite would be sustained, with fiscal problems still severe in Ireland and other peripheral euro-zone countries such as Portugal, and many investors inclined to cut risk exposure before year-end.
"It's absolutely vital for the authorities to take pro-active steps in order to try to resolve this crisis as soon as possible. The market should see some relief in relation to that," said Henk Potts, equity strategist at Barclays Wealth.
In midday trade, the Dow Jones industrial average <.DJI> rose 180.39 points, or 1.64 percent, to 11,188.27. The Standard & Poor's 500 Index <.SPX> gained 20.93 points, or 1.78 percent, to 1,199.52. The Nasdaq Composite Index <.IXIC> climbed 48.60 points, or 1.96 percent, to 2,524.61.
GM's common stock, priced at $33 in the initial public offering on Wednesday night, was up 6.18 percent at $35.04 on the New York Stock Exchange.
The pan-European FTSEurofirst 300 index<.FTEU3> of top shares climbed 1.43 percent to close at 1,108.12 points after being as low as 1,091.06.
"Ireland had been the cause of the sell-off this week and with the country keen to talk to the IMF/EU, this has calmed everyone's jitters," said Mark Priest, senior equities trader at ETX Capital
"If everything is going to be stable and they are going to throw money at the problem, then there is no reason why these markets can't rally."
The MSCI world equity index <.MIWD00000PUS> gained 1.73 percent after touching a one-month low the previous day.
The gains came after Japan's Nikkei <.N225> jumped 2.1 percent to close above 10,000 for the first time since late June, while China shares <.SSEC> also rose. Emerging stocks <.MSCIEF> were up 1.6 percent.
EURO'S GAINS TRIMMED
The enthusiasm for stocks led to some paring back of the euro's gains after Ireland's central bank chief said he expected Dublin to receive tens of billions of euros in loans from European partners and the IMF.
The euro
Analysts cautioned, however, that lingering worries about other debt-stricken European economies, including Portugal and Spain, will likely continue to weigh on the euro, which has lost about 3 percent this month as funds liquidated long positions.
The dollar <.DXY> was down 0.52 percent against a basket of currencies.
But the dollar rose 0.43 percent to 83.60 yen
The 10-year Irish/German government bond yield spread was last at 567 basis points, around 15 basis points tighter for the day but off the session's tightest levels.
The benchmark 10-year U.S. Treasury note
U.S. crude oil futures