* World stocks firm, on track for best week so far in 2011
* Greenback rallies as QE2 extension seen unlikely
* Gold slips on dollar strength
* Oil dips but Mideast, Libya, support
(Updates prices, adds Nikkei futures)
By Rodrigo Campos
NEW YORK, March 25 (Reuters) - Global stocks climbed on
Friday and were on track to post their best week since
December, while the dollar rose after a Federal Reserve
official said the central bank will have to tighten monetary
policy soon.
U.S. stocks advanced after strong earnings and an
optimistic outlook by software maker Oracle fueled hopes that a
global resurgence in technology spending remained intact.
However, volume continued to be weak.
"When you see big names like these beat expectations like
this, it's very encouraging," said Michael Vogelzang, president
and chief investment officer at Boston Advisors, which owns
Oracle stock.
"Oracle is taking share, which is great to see, but you
don't post these numbers in a soft environment. The market is
getting stronger."
U.S. equities are leading global stocks and setting up to
close their best week in at least 16, albeit on thin volume.
The MSCI All-Country index <.MIWD00000PUS> gained 0.1
percent and was on track to post its best week since at least
early December.
Volume has dwindled in U.S. and other equity markets as
violence in the Middle East and northern Africa, coupled with
Japan's natural disasters two weeks ago and its nuclear power
crisis, obscure the outlook for the global economic recovery.
The Dow Jones industrial average <> gained 69.06
points, or 0.57 percent, to 12,239.62. The Standard & Poor's
500 Index <.SPX> added 6.84 points, or 0.52 percent, to
1,316.50. The Nasdaq Composite Index <> rose 14.55 points,
or 0.53 percent, to 2,750.97.
The dollar rallied after several top Federal Reserve
officials said the U.S. central bank is unlikely to extend its
bond-buying stimulus program beyond a planned $600 billion.
Philadelphia Fed Bank President Charles Plosser also said
the Fed will have to reverse its easy money policy in the
"not-too-distant future" to avoid sowing the seeds of
inflation, changing the outlook for benchmark interest rates.
The euro and yen hit session lows versus the greenback
after Plosser's comments, adding to strength in the U.S.
currency after government data showed the world's largest
economy grew more quickly than previously thought in last
year's fourth quarter.
The dollar index <.DXY>, a gauge of the greenback against a
basket of major currencies, jumped more than 0.7 percent.
The euro <EUR=EBS> was last down 0.76 percent at $1.40698.
The yen traded at 81.41 from a session low of 81.49 per
dollar <JPY=>.
European leaders reached an agreement on new anti-crisis
measures at a summit but were forced to delay increasing their
rescue fund and acknowledged they faced new threats from a
government collapse in Portugal.
Portugal's president consulted political leaders on whether
to call a snap election after the Socialist prime minister
resigned following parliament's rejection of his reforms, aimed
in part at preventing the need to request a bailout from the
European Union and International Monetary Fund.
[].
Portuguese bond yields hit new highs after Standard &
Poor's downgraded the country's debt ratings and warned it
could cut them again.
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 another likely
candidate to seek a bailout.
European shares closed slightly higher on stronger economic
signs and corporate results, but the debt crisis kept gains in
check.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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, PREY TO MIDEAST
U.S. crude <CLc1> and Brent <LCOc1> dipped for the day but
posted weekly gains as investors eyed the unrest in Libya and
the Middle East.
Spot gold <XAU=> lost nearly 2 percent as the dollar spiked
following a brief rally to an all-time high $1,447.40 on
Thursday.
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.
But U.S. dollar-denominated Nikkei futures <NKc1> dropped
more than 1 percent.
(Additional reporting by Ann Saphir, Steven C. Johnson, Ryan
Vlastelica, Wanfeng Zhou, Axel Bugge and Shrikesh Laxmidas;
Editing by Kenneth Barry and Dan Grebler)
