GLOBAL MARKETS-World stocks rebound after upbeat US data

* World stocks rebound after upbeat US data

* Ifo, UK retail data weigh on Europe

* US dollar lower versus euro in volatile trade

By Vivianne Rodrigues

NEW YORK, March 25 (Reuters) - World stocks rebounded from earlier losses on Wednesday, led by an advance in Wall Street, as upbeat U.S. housing and durable goods data fueled hopes the economic downturn in the United States may be moderating.

New home sales in the U.S. unexpectedly rose at their fastest pace in 10 months in February, while U.S. orders for long-lasting manufactured goods also unexpectedly rebounded in the same month. For details see [ID:nN25415362].

The U.S. economic news helped offset earlier pessimism in Europe sparked by a weak German corporate sentiment survey and poor UK retail data.

"It's about time we had some good news," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities in London. "Does this mean it's all coming together? Far from it, but it provides a respite from what has been a monotonous stream of poor newsflow."

In early afternoon trading, stock indexes were higher in Wall Street, led by gains in homebuilders and industrial conglomerates.

The Dow Jones <.DJI>, S&P 500 <.SPX> and Nasdaq Composite <.IXIC> were up more than 1 percent.

In Europe, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.4 percent to a provisional close of 743.57 points. The index earlier sank as low as 732.7 after the Munich-based Ifo economic research institute said its business climate index, based on a monthly poll of around 7,000 firms, fell to 82.1 from 82.6 in February.

Meanwhile in the UK, the Confederation of British Industry's distributive trades survey balance fell to -44 in March from -25 in February, triggering broad declines in sterling.

Oil prices also retraced early losses on Wednesday, rising to around $54 a barrel and shrugging data from the Energy Information Administration that showed U.S. weekly crude stocks rose last week to their highest since 1993. [EIA/S]

U.S. light crude for May delivery was last up 10 cents at $54.08 a barrel, after earlier falling by as much as $2.12.

GEITHNER'S COMMENTS

The U.S. dollar slid against the euro in volatile trading after U.S. Treasury Secretary Timothy Geithner expressed openness to expanded use of an IMF Special Drawing Rights (SDR) currency basket even though he added that the greenback would remain the world's reserve currency for a long time. [ID:nN25385009]

Investors initially interpreted his remarks as negative for the dollar, sending it to a session low against the euro.

The euro was last 0.5 percent higher at $1.3548 . Against the yen, the dollar down 0.15 percent at 97.77 yen .

China's central bank governor said earlier this month the world should consider the Special Drawing Right (SDR) -- a basket of dollars, euros, sterling and yen -- as a super-sovereign reserve currency.

Geithner, responding to a question at a Council of Foreign Relations event in New York, said he had not read the Chinese proposal but added, "as I understand it, it's a proposal designed to increase the use of the IMF's Special Drawing Rights. I am actually quite open to that suggestion."

In the fixed income markets, government bonds in the US and in Europe were hit by supply worries.

U.S. Treasury debt prices fell as traders made room for a $34 billion in new supply of five-year notes. Concerns over burgeoning Treasury supply intensified after poor investor showing at an auction of 30-year U.K. government bonds worth 1.75 billion pounds analysts said.

Ten-year Treasury notes fell 9/32 for a yield of 2.74 percent, up from 2.71 percent late on Tuesday. Meanwhile, June bund futures were steady. (Additional reporting by Natsuko Waki in London, Leah Schnurr, Nick Olivari and Richard Leong in New York)