* Libya declares ceasefire, stocks rise
* G7 intervenes to weaken yen
* Dollar jumps more than 3 percent vs. yen
* Oil rally reversed after Libya move
(Updates prices to mid-afternoon)
Al Yoon
NEW YORK, March 18 (Reuters) - Global stocks rose on
Friday after a Libya ceasefire reduced tension in the region
and the Group of Seven intervened to break the yen's rise,
calming markets.
World shares as measured by MSCI <.MIWD00000PUS> advanced0.8 percent, erasing some of the 5.6 percent drop over the
past six trading days and bringing the index back to about
even for 2011.
Oil fell from earlier highs after Libya declared a
ceasefire in the country to protect civilians and comply with
a United Nations resolution passed overnight.
"That (Mideast unrest) quieting down and Japan quieting
down will lead to buying," said Stephen Massocca, managing
director at Wedbush Morgan in San Francisco.
Brent crude <LCOc1> had surged above $117 a barrel on
worries of escalating unrest in oil-rich countries after the
United Nations approved military action to contain Libya's
Muammar Gaddafi. Brent crude for May delivery slid $1.10, or 1
percent to $113.80 a barrel after the ceasefire. U.S. crude
fell 54 cents, or 0.5 percent, to $100.88.
The U.N. Security Council passed a resolution endorsing a
no-fly zone for Libya. It authorized "all necessary measures"
to protect civilians against Gaddafi's forces.
[]
The dollar climbed nearly 3 percent to 80.95 yen,
retreating from a session high of around 82 yen <JPY=>,
following the G7 announcement, which came just as Tokyo's
stock market opened.
The show of solidarity by the G7 major developed economies
to support Japan through its biggest crisis since World War
Two comes a day after the yen soared to a record 76.25 per
dollar in chaotic trading. It is the first coordinated
currency intervention by the G7 in a decade.
The G7 "is just helping sentiment, and stocks sensitive to
risk will push on. But optimism is going to be guarded as
there are no firm resolutions surrounding the Japanese nuclear
crisis and the Middle East, and anything can happen on the
weekend," said Giles Watts, head of equities at City Index in
London.
WALL ST UP ON BANKS, NIKKEI'S REBOUND
The Dow Jones industrial average <> gained 100.58
points, or 0.85 percent, to 11,875.17. The Standard & Poor's
500 Index <.SPX> increased 8.50 points, or 0.67 percent, to
1,282.22 and the Nasdaq Composite Index <> climbed 16.57
points, or 0.63 percent, to 2,652.62.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHICS:
-- G7 intervention
http://link.reuters.com/sub68r
-- Japan disaster
http://r.reuters.com/fyh58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Financial stocks rose after the Federal Reserve notified
some of the largest U.S. banks that they passed a second round
of stress tests. The central bank said it would let 19 of
those banks use some of their massive capital cushions to buy
back shares, repay the government and boost dividends.
JPMorgan Chase & Co <JPM.N> and Wells Fargo & Co. <WFC.N>
are among those planning dividend boosts. JPMorgan's stock
gained 3.2 percent to $45.97, while Wells Fargo shares added
1.8 percent to $31.94.
Industrial shares also rose on bets they could benefit in
Japan's rebuilding effort. General Electric Co <GE.N> rose 1.1
percent to $19.43, while Caterpillar <CAT.N> advanced 2
percent to $105.18.
Before the U.S. trading open, European equities pared
earlier gains after China's central bank raised lenders'
required reserve ratios. The FTSEurofirst 300 <> added
0.2 percent to close at 1,088.82.
Japan's Nikkei share index <> climbed 2.7 percent,
recouping some of the week's losses as Japan reeled from the
aftermath of an earthquake, tsunami and nuclear power plant
crisis. []
YEN AND BONDS SLIP, GOLD GAINS
The euro <EURJPY=R> rose 3.6 percent to 114.70 yen, after
climbing to a session high of 115.50 yen earlier. Some traders
noted the scale of intervention was so far a tame effort to
stem the yen's surge.
The euro <EUR=> rose to a four-month high of $1.4145 after
the intervention in euro.yen.
Some market observers said even massive official selling
might not restrain the yen for long, pointing to Japan's last
intervention in September 2010 when it sold a huge 2.1
trillion yen, or around $25 billion worth, but only managed to
push the dollar up to 85.77 yen from 82.85 yen.
"It would need to be concerted and aggressive ... and even
then I'm skeptical," said Richard Wiltshire, a currency trader
at ETX Capital in London.
A New York Federal Reserve spokesman said the U.S. central
bank had joined the G7 in intervening to weaken the yen.
Demand for the safety of government debt eased. A decline
of 6/32 in the prsie of the benchmark 10-year U.S. Treasury
note <US10YT=RR> pushed its yield up 0.02 percentage point to
3.28 percent.
Gold <XAU=> rose $13.75 to $1,416.10 an ounce, but was off
a record around $1,444 hit last week.
(Additional reporting by Anirban Nag, Joanne Frearson and
Chris Reese, Richard Leong, Edward Krudy, Chuck Mikolajczak,
Steven C. Johnson and Emelia Sithole-Matarise; Writing by Al
Yoon; Editing by Jan Paschal)
