* Oil surges on news of Libyan air strike near oil terminal
* Gold climbs to record above $1,440 an ounce
* MSCI world equity index off 0.2 pct
* U.S. stocks up 0.1 pct to up 0.4 pct, bonds drop
(Updates prices)
By Caroline Valetkevitch
NEW YORK, March 2 (Reuters) - Brent crude oil prices ran upsharply on Wednesday on news of an airstrike in Libya near an
oil terminal, while gold hit a record high as investors rushed
into a safe-haven trade.
World stocks slipped, while on Wall Street, stocks traded
nearly flat to moderately higher.
Oil prices jumped to approach 2-1/2-year highs on news that
airstrikes hit Brega about 1.2 miles (about 2 kilometers) from
a Libyan oil terminal, after Libyan leader Muammar Gaddafi
launched land and air offensives to retake territory in Libya's
eastern region. Earlier, Brent crude for April delivery hit an
intraday peak at $117.81 a barrel. For details, see
[]
Gold <XAU=> climbed to an all-time record at $1,440.10 an
ounce, building on a 6 percent rise in February, its biggest
one-month climb since August.
The MSCI world equity index <.MIWD00000PUS> dipped 0.2
percent and was off about 2 percent from a 30-month peak set in
February. The index is still up about 3 percent since the start
of the year.
Investors were nervous that political instability could
spread to major oil producer Saudi Arabia, a central U.S. ally
in the region, and other oil suppliers. The higher oil prices,
they said, could derail the economic recovery.
"There is an increasingly strong correlation between
equities and oil," said John Brady, senior vice president at MF
Global in Chicago.
As investors made their flight-to-safety bids, the dollar
fell to a record low against the Swiss franc. U.S. Treasury
debt prices declined.
U.S. stocks were flat to modestly higher, with upbeat U.S.
labor market data helping to offset the spikes in oil prices.
[]
The FTSEurofirst 300 index <> of top European shares
slid 0.7 percent to close at 1,153.73 on fears that
skyrocketing oil prices could drastically curb or halt growth.
WORRIES ABOUT SAUDI ARABIA
Forces loyal to Muammar Gaddafi launched a major offensive
against rebels in eastern Libya, sparking a rebel warning that
foreign military help might be needed to "put the nail in his
coffin" and end Gaddafi's long rule. []
Saudi Arabia's stock markets declined for a 13th session
and hit a 22-month low, while Dubai equities fell to a
6-1/2-year low, reflecting investors' worries over planned
protests in Saudi Arabia.
"We are seeing a significant elevation in risk premiums,
with investors revising their expectations for the region,"
said Hashem Montasser, managing partner at Frontlane Capital, a
Dubai-based asset management firm. "The earnings outlook is
very unclear."
Saudi Arabia's benchmark stock index <.TASI> fell nearly 4
percent at one point to a fresh 22-month low.
Brent crude for April delivery <LCOc1> rose $1.27 to
$116.69 a barrel in early afternoon trading on Wednesday. On
Tuesday, Brent April crude rose $3.62, or 3.24 percent, to
settle at $115.42 a barrel -- its highest close since August
2008.
U.S. crude for April delivery <CLc1> rose $2.41 to $102.04
on Wednesday.
WALL ST VIGILANT ON OIL
In the U.S. stock market, the Dow Jones industrial average
<> added 14.64 points, or 0.12 percent, to 12,072.66. But
The Standard & Poor's 500 Index <.SPX> was up 2.91 points, or
0.22 percent, at 1,309.24. The Nasdaq Composite Index <>
was up 9.85 points, or 0.36 percent, at 2,747.26
"We're taking a breather, waiting for the next foot to fall
in the oil markets," said Nicholas Colas, chief market
strategist at the ConvergEx Group in New York. "The market is
looking three to four months out, trying to figure out what
these higher oil prices will do to consumer spending."
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 11/32, its yield at 3.44 percent, up from 3.40 percent on
Tuesday. News of an improved U.S. labor market helped to
overshadow turmoil in oil-producing regions.
Data showed U.S. private-sector employers added more jobs
than expected last month, which analysts said could bode well
for the more closely watched U.S. government's monthly jobs
report, due on Friday.
The Swiss franc soared to a record high versus the dollar
<CHF=EBS> while the euro <EUR=EBS> climbed as high as $1.3890
on trading platform EBS, its strongest level since Nov. 9.
(Reporting and writing by Caroline Valetkevitch; Additional
reporting by Edward Krudy, Ellen Freilich, Wanfeng Zhou,
Natsuko Waki, Harpreet Bhal and Carolyn Cohn; Editing by Jan
Paschal)
