* Stocks volatile on pre-earnings support, euro fears
* Oil rallies to $110 in London, grains surge (Updates prices)
By Barani Krishnan
NEW YORK, Oct 11 (Reuters) - Stocks were choppy and commodities extended their rally on Tuesday as uncertainty over the euro zone rescue fund hung over markets before the start of the U.S. earnings report season.
With sentiment still fragile after the pummeling markets
took in the past month, stocks swung back-and-forth ahead of
third-quarter results from aluminum producer Alcoa Inc
"The market was overshot on the downside and now we're making it up to a certain degree," said Wayne Kaufman, chief market strategist at John Thomas Financial in New York.
In commodities trading, oil prices rose as much as 2 percent, while U.S. agricultural markets rallied between 5 and 8 percent on bets a U.S. government crop report due on Wednesday would show smaller-than-expected stockpiles .
Investors waited for Slovakia to become the last of 17 EU member states to vote to boost the size and powers of the European Financial Stability Facility -- the fund set up to rescue the region's troubled economies.
The vote in Slovakia's parliament may not pass until later this week, complicating access to funds that could stem the crisis. That may rattle markets through the week, as it adds an element of uncertainty to a fragile trading environment.
"It seems like the vote is a little in doubt. Everyone is on hold waiting on what's happening with the European Union," said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida.
Global stocks and the euro had rebounded sharply in recent days on rising hopes Europe will recapitalize struggling banks and bail out debtor nations. For more, see: [ID:nL5E7LB0V9] The euro initially fell on Tuesday after the latest twist in Europe's financial debacle, before rebounding.
The Dow Jones industrial average <.DJI> was down 9.73 points, or 0.09 percent, at 11,423.45. The Standard & Poor's 500 Index <.SPX> was up 2.06 points, or 0.17 percent, at 1,196.95. The Nasdaq Composite Index <.IXIC> was up 18.65 points, or 0.73 percent, at 2,584.70.
U.S. stocks jumped 3 percent in Monday's trading, lifting the benchmark S&P 500 above its 50-day moving average the first time since late July, though the gains came on thin volume due to the Columbus Day holiday.
With the index trading near the upper end of its recent range, it is unclear whether institutional buyers will support the market further or if it will retreat.
"I have not seen yet a tremendous amount of long-only (fund) participation in this. It's mostly hedge fund-to-hedge -fund pinging stocks back and forth," said Sam Ginzburg, head of capital markets at First New York in New York.
Alcoa's stock was up about 2 percent to $10.27, making it the best performer on the Dow. Over the past week, analysts have lowered their consensus earnings estimates for the aluminum producer, citing a precipitous drop in metals prices in recent months sparked by global economic concerns. [ID:nN1E7990GK]
"Expectations are so low that Alcoa doesn't have to say a lot in order to beat expectations," said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco. "Everyone expects a double-dip recession, so all you need is a little bit of good news and markets could take off on that."
Global stocks, as measured by MSCI's All-Country World index <.MIWD00000PUS>, were up 0.3 percent. The index has rallied recently on improved sentiment, particularly after a weekend pledge by German and French leaders to come up with a plan to tackle the debt crisis. [ID:nP7E7KK00E]
The FTSEurofirst 300 <.FTEU3> index of top European shares, closed down 0.3 percent, after rising 1.7 percent on Monday.
Prices of U.S. Treasuries fell, erasing gains that brought
benchmark yields to historic lows last week, as investors' most
acute anxiety over Europe's debt crisis subsided. The benchmark
10-year U.S. Treasury note