* World stocks, crude gain on dollar weakness
* 10-year Bund yield falls below 3 percent
* Euro gains vs dollar after positive comments on Greece (Updates prices, adds comment, details)
By Wanfeng Zhou
NEW YORK, May 27 (Reuters) - Major stock indices and commodity prices rose on Friday as the dollar weakened broadly on signs that the U.S. economic recovery is losing momentum.
The euro rallied against the dollar after reassuring comments out of Europe tempered fears of a near-term Greek default, although it slipped to another record low versus the Swiss franc as the region's debt crisis remains far from resolved.
Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, dealing a blow to hopes of a recovery in the housing market. Separate data showed U.S. consumer spending rose less than expected in April. For details, see [ID:nN271881]
"Softer U.S. data may renew the debate about the introduction of a third round of quantitative easing, and that's a negative for the dollar," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
World equities measured by the MSCI All-Country World Index <.MIWD00000PUS> rose 0.9 percent, though they remain on pace for their biggest monthly percentage losses in a year.
Wall Street stocks gained. The Dow Jones industrial average <.DJI> was up 66.64 points, or 0.53 percent, at 12,468.87. The Standard & Poor's 500 Index <.SPX> was up 7.81 points, or 0.59 percent, at 1,333.50. The Nasdaq Composite Index <.IXIC> was up 165.96 points, or 0.57 percent, at 2,798.84.
"We're having a little bit of a snap-back rally given the stretch of sell-offs we had earlier this week," said Doug Godine, head of institutional sales and trading at Signal Hill Capital in Baltimore. "I don't think there will be a lot of volume today, as no one is going to make any huge bets going into the holiday weekend."
U.S. markets will be closed on Monday for the Memorial Day holiday.
Nomura said in a note that global fund investors increased their selling of equities to a net $9.4 billion for the week of May 19-25, the heaviest in 10 months and up from a net outflow of $5 billion the previous week.
Europe's FTSEurofirst 300 <.FTEU3> index of leading stocks added 0.7 percent, helped by gains in bank shares after the Financial Times said stringent capital requirements for European banks could be relaxed. [ID:nLDE74Q00T]
The weaker dollar, along with persistent Middle East tensions, helped boost oil prices. Against a basket of currencies, the dollar <.DXY> fell 0.5 percent
Brent crude
Gold hit its highest in more than three weeks
GREECE WORRIES
Worries about Greece pushed 10-year German Bund yields
Greece's prime minister failed to convince opposition leaders on Friday to support tougher austerity measures to free up EU/IMF aid needed to avert a debt default. [ID:nLDE74Q0TQ]
But the euro gained momentum in the New York session after European Central Bank Governing Council member George Provopoulos said Greece will be able to repay its debt in full without restructuring if it sticks to its austerity plan. [ID:nFAT007211].
French President Nicolas Sarkozy said France would defend and support the euro. He also said the country was opposed to any kind of debt restructuring for Greece. [ID:nP6E7GA026]
"Those comments reduce the near-term risk of Greek default and eased the pressure on the euro," said Joe Manimbo, currency strategist at Travelex Global Business Payments in Washington.
The euro
Fitch cut its outlook on Japan's sovereign debt ratings, saying the cost of the March earthquake and tsunami and the still-unknown bill for the clean-up after the nuclear crisis would further strain public finances.[ID:nL3E7GR1A6]
The yen initially weakened on the news, before rebounding.
The dollar was down 0.4 percent at 80.98 yen
U.S. Treasuries made up early losses to be little changed
after the release of weak U.S. housing data. Benchmark 10-year
Treasuries