* World stocks firm, on track for best week so far in 2011
* Australian dollar hits 2-yr high vs greenback
* Portugal 10-year yield at euro-era high
* Oil, gold steady, watching Mideast, Libya
(Recasts, updates prices; adds analyst quotes)
By Rodrigo Campos
NEW YORK, March 25 (Reuters) - Global stocks rose on Friday
and were on track to post their best week since November, while
the euro slipped against the dollar on increasing concern about
the worsening debt crisis in Portugal.
U.S. stocks advanced after an optimistic outlook by
software maker Oracle fueled hopes that a global resurgence in
technology spending remained intact. However, volume remained
weak.
"Oracle shows IT spending continues to be strong," said
Michael Quigley, tech analyst at Wedgewood Partners in St.
Louis. "The whole software chain seems to be doing well."
U.S. equities are leading global stocks and setting up to
close their best week of the last 20, albeit on thin volume.
"The market has bounced back a lot," said Andrew Wilkinson,
senior market analyst at Interactive Brokers Group in
Greenwich, Connecticut. "We're pulling into the weekend with a
real rebound in risk appetite."
The MSCI All-Country index <.MIW0000PUS> gained 0.4 percent
and was on track to post its best week since early November.
Volume has dwindled in U.S. and other markets, including
Europe, as violence in the Middle East and northern Africa,
coupled with Japan's natural disasters two weeks ago and its
ongoing nuclear crisis, cloud the outlook for the global
economic recovery.
The Dow Jones industrial average <> was up 84.46
points, or 0.69 percent, at 12,255.02. The Standard & Poor's
500 Index <.SPX> was up 9.11 points, or 0.70 percent, at
1,318.77. The Nasdaq Composite Index <> was up 25.40
points, or 0.93 percent, at 2,761.82.
Portugal's president consulted political leaders on Friday
on whether to call a snap election after the Socialist prime
minister resigned following parliament's rejection of his
reforms. The crisis could force Lisbon to request a bailout
from the European Union and International Monetary Fund. For
more, see: [].
Portuguese bond yields hit new highs after Standard &
Poor's downgraded the country's debt ratings and warned it
could cut them again.
"For most of the week the market has treated Portugal as an
isolated problem that will not spread to other parts of Europe
but this sentiment is losing popularity very quickly," said
Kathy Lien, director of currency research at GFT in New York.
She added that the downgrade prompted "the first major
rejection of Portuguese assets."
Still, Spain's Prime Minister Jose Luis Rodriguez Zapatero
said he did not fear contagion from a potentially prolonged
period of political instability in Portugal. []
Spain is considered by the markets as a likely candidate to
be the fourth euro zone country to seek a bailout following
Greece, Ireland and possibly Portugal.
The yield on 10-year Portuguese government bonds rose to a
euro-era high above 8 percent, well above the level the
government says is sustainable.
European shares rose on stronger signs on the economy and
corporate results, but gains were tempered by the euro zone
debt problems.
The euro <EUR=EBS> was last down 0.2 percent at $1.4128,
having earlier hit a session low of $1.41133 on trading
platform EBS.
The dollar index <.DXY>, a gauge of the greenback against a
basket of major currencies, rose 0.3 percent, supported by
revised U.S. GDP data.
The yen traded above 81 per dollar <JPY=>, a level it has
clung tightly to all week since a rare coordinated intervention
by leading central banks last Friday to curb its appreciation.
Higher-yielding currencies gained as the global economic
outlook boosted risk appetite and on growing demand for
dollar-funded carry trades.
The Australian dollar hit a fresh 29-year peak against the
U.S. currency as traders said gains triggered a series of
automatic buy orders.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FX COLUMN-Return of the yen carry trade []
Reuters polls on world stock markets: []
Graphic on world stock polls: http://r.reuters.com/juw68r
European sovereign debt crisis: http://r.reuters.com/hyb65p
Japan disaster in figures: http://r.reuters.com/ser58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
OIL, GOLD PREY TO MIDEAST
Both U.S. crude <CLc1> and Brent <LCOc1> were on track to
post healthy weekly gains, though prices were little changed on
Friday.
Investors were keeping a close eye on protests in Yemen,
Bahrain and Syria.
"So long as ongoing problems in the Middle East continue to
elevate risks of a further supply disruption, there is a strong
likelihood of a price spike in the second quarter," said J.P.
Morgan analysts headed by Lawrence Eagles.
Spot gold held steady below the previous session's record
highs, as worries over euro zone's debt crisis and Middle East
turmoil supported sentiment. []
Japan's Nikkei index <> rose 1.1 percent to post its
best week since November as foreign investors scooped up
battered shares. In the previous two weeks, the Nikkei had lost
nearly 14 percent.
(Additional reporting by Steven C. Johnson, Angela Moon,
Wanfeng Zhou, Axel Bugge and Shrikesh Laxmidas; Editing by Dan
Grebler)
