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GLOBAL MARKETS-Oil and metals rally, lifting stocks

Published 05/18/2011, 11:25 AM
Updated 05/18/2011, 11:28 AM
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* Commodities, stocks rebound from lows

* Wall St cautious ahead of Fed minutes

* European debt woes still in focus (Updates prices, adds EIA crude data, changes comment)

By Rodrigo Campos

NEW YORK, May 18 (Reuters) - Oil and other commodity prices rose on Wednesday, rebounding from recent losses, and global stocks gained after five straight days of declines as investors sought bargains in hard-hit markets.

On Wall Street, stocks were led by gains in commodity-related shares, but caution remained ahead of minutes from a Federal Reserve meeting expected later in the day.

NYMEX and Brent crude prices extended gains after data from the Energy Information Administration showed U.S. crude inventories fell slightly last week as refinery utilization rose.

Brent crude moved above $111 a barrel, adding 1.8 percent. U.S. crude approached $100, up more than 2 percent and cutting the month's losses to just below 13 percent.

Copper jumped 2.7 percent to a two-week high but doubts about short-term fundamentals were expected to cap prices.

"Sentiment has improved," Credit Agricole analyst Robin Bhar said, noting "... the feeling maybe that what we went through in the last few weeks was simply overdone."

A stronger dollar and renewed concerns about global economic growth have been cited for plummeting commodity prices in the first two weeks of May.

STOCKS UP, EURO FLAT

World stocks as measured by MSCI <.MIWD00000PUS> jumped 0.8 percent, bouncing off Tuesday's losses, which took the index to its lowest since April 18.

Europe's FTSEurofirst 300 <.FTEU3> gained around 0.5 percent.

The Dow Jones industrial average <.DJI> added 18.24 points, or 0.15 percent, to 12,497.82. The Standard & Poor's 500 <.SPX> rose 5.30 points, or 0.40 percent, to 1,334.28. The Nasdaq Composite <.IXIC> gained 14.95 points, or 0.54 percent, to 2,798.16.

The euro was volatile as it struggled to hold gains against the dollar after early demand ran into technical resistance. If Federal Reserve meeting minutes, due later on Wednesday, suggest U.S. interest rates will remain low, the single currency may catch fresh bids.

The euro edged up 0.1 percent to $1.4253 . It slumped to a seven-week low of $1.4048 on Monday.

"The possibility of a more dovish tone in the (Fed) minutes as well as European inflation figures over the coming days could well see confidence in pursuing euro strength above $1.43," said Lena Komileva, global head of G10 currency strategy at BBH.

Yields on a German bond auction were lower and those at a Portuguese sale higher than in previous bidding, reflecting the perceived safety of bonds from the euro zone's strongest economy while countries on the bloc's periphery struggle. (Additional reporting by Angela Moon, Robert Gibbons, Naomi Tajitsu and Pratima Desai; Editing by Dan Grebler)

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