GLOBAL MARKETS-Stocks up in choppy session, Spain yields near record - Reuters UK GLOBAL MARKETS-Stocks up in choppy session, Spain yields near record - Reuters UK

Tuesday, June 12, 2012

GLOBAL MARKETS-Stocks up in choppy session, Spain yields near record - Reuters UK

GLOBAL MARKETS-Stocks up in choppy session, Spain yields near record - Reuters UK

Tue Jun 12, 2012 7:16pm BST

* Euro rises vs U.S. dollar

* U.S. oil up, Brent crude falls

* Treasury prices slip, 10-year note yield nears 1.65 pct (Updates prices, comment)

By Rodrigo Campos

NEW YORK, June 12 (Reuters) - Stocks on world markets edged higher on Tuesday as battered shares attracted traders, but Spanish bond yields were near euro-era highs on doubts about Madrid's bank bailout and Sunday's election in Greece.

Wall Street stocks were up led by energy shares as U.S. crude oil recovered some ground after Monday's slide.

Spanish government bond yields earlier hit their highest since the euro was launched in 1999 on concern over how difficult it may be for Madrid to access debt markets in the longer term after its banks are bailed out.

The structure of the bailout has not been confirmed, but current holders of Spanish debt fear the expected issuance would have a higher repayment priority than regular government bonds.

Concerns the Greek election on June 17 would bring to power parties opposed to its current bailout plan and force a disorderly exit from the euro zone were rekindled by a report EU officials were considering ways to manage fallout from such an event.

"As far as the European situation is concerned, it's a traders market," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "Investors are not on the sidelines but they want to see some stability reached."

In early afternoon trading in New York, the Dow Jones industrial average rose 104.26 points, or 0.84 percent, to 12,515.49. The S&P 500 Index gained 8.50 points, or 0.65 percent, to 1,317.43. The Nasdaq Composite added 18.10 points, or 0.64 percent, to 2,827.83.

MSCI's world equity index rose 0.36 percent and the euro zone's blue-chip Euro STOXX 50 index closed up 0.27 percent. The Thomson Reuters Peripheral Eurozone Countries Banks Index fell 1.6 percent.

The euro traded near $1.25, up 0.3 percent on the day. Relative strength in the common currency is seen as short-lived ahead of the Greek election.

"Selling into strength should continue to be the market's mentality and nobody will be comfortable holding risk headed into this upcoming weekend," said Dean Popplewell, chief currency strategist at OANDA in Toronto.

The growing impact of the euro zone crisis on the economic outlook was underlined by data showing a surprise fall in British manufacturing output in April.

Global growth concerns also pushed Brent crude oil prices down 0.9 percent to $97.14 a barrel. U.S. oil was up 0.8 percent at $83.36 a barrel after earlier hitting a one-year low at $81.07.

Market volatility prompted selling in copper, with three-month copper on the London Metal Exchange at $7,405 a tonne, 0.2 percent below the $7,420 at the close on Monday, when it rose 1.7 percent. (Reporting by Rodrigo Campos and Julie Haviv; Editing by Andrew Hay)


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