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GLOBAL MARKETS-World stocks edge up, commods hold to gains

Published 05/19/2011, 10:51 AM
Updated 05/19/2011, 10:56 AM
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* MSCI world equity index rises 0.2 percent

* U.S. jobless claims fall more than expected

* Greek uncertainty continues to weigh on euro (Updates prices, adds U.S. market open, changes comment, byline, dateline; previous LONDON)

By Rodrigo Campos

NEW YORK, May 19 (Reuters) - World stocks rose for a second day on Thursday, boosted by European equities which rose to their highest in almost a week, while commodities mostly held to the previous session's steep gains.

The euro wobbled against the U.S. dollar, pressured by some reported central bank selling, with the single currency still hampered by Greece's uncertain debt situation.

On Wall Street, stocks were little changed after data showed weekly applications for unemployment insurance fell more than expected, but separate data showed an unexpected drop in home resales in April and regional factory activity grew much more slowly than expected in May.

In Europe, energy shares advanced on firmer crude prices and auto shares rose on improving prospects for vehicle markets. Miners were also in demand after Glencore , the world's top diversified commodities trader, made a bumper $11 billion market debut in London.

"Markets had a bounce yesterday and momentum will continue ... with bargain hunting coming in," said Matt Brown, trader at Catalyst Markets.

The FTSEurofirst 300 index <.FTEU3> rose 0.8 percent. The MSCI world equity index <.MIWD00000PUS> and the Thomson Reuters global stock index <.TRXFLDGLPU> were up around 0.2 percent on the day.

The Dow Jones industrial average <.DJI> rose 28.00 points, or 0.22 percent, to 12,588.18. The Standard & Poor's 500 Index <.SPX> edged up 1.16 points, or 0.09 percent, to 1,341.84. The Nasdaq Composite Index <.IXIC> gained 4.15 points, or 0.15 percent, to 2,819.15.

"Long-term demand from China is really driving up commodity stocks and ultimately that is the reason why investors put money into the Glencore IPO," said Yusuf Heusen, senior sales trader at IG Index.

U.S. crude oil edged up 0.1 percent to $100.25 a barrel after the previous day's 3.3 percent jump. Copper dipped 0.2 percent after a more than 3 percent gain on Wednesday.

Commodity prices have fallen sharply in May as the dollar's weakness reversed. U.S. crude is down more than 12 percent for the month.

Higher-risk assets also have been helped in recent months by the Federal Reserve's $600 billion bond-buying program, known as QE2, which has generated a flow of cash. Investors face the end of the QE2 program next month. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Poll: the end of the Fed's QE2. story [ID:nSLAJGE7U1]

factbox [ID:nLDE74I0R4] Asset moves since QE2 was first signaled, to mid May:

http://r.reuters.com/gew59r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ EURO STILL UNDER GREEK PRESSURE

Analysts said investors were looking for opportunities to start buying the euro and riskier currencies after recent falls, but sovereign debt concerns kept the single currency pinned below a key 55-day moving average around $1.4295 on trading platform EBS .

The euro edged up 0.1 percent to $1.4267 while the dollar index <.DXY>, a gauge of the greenback against a basket of currencies, fell 0.1 percent.

A restructuring of Greece's debt seemed to be off the table for now, according to euro zone sources, lending the whole issue a positive spin, but still investors were not willing to commit buying the euro's upside. For the story, click on [ID:nLDE74I0QP].

"The uncertainty about Greece has kept the euro under pressure," said Mary Nicola, currency strategist at BNP Paribas in New York. (Additional reporting by Gertrude Chavez-Dreyfuss, Angela Moon and the London markets teams)

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