GLOBAL MARKETS-Gold hits record, oil tops $122 a barrel

                                
  
                                
 * Portugal bond yield at new high as bailout fears grow
                                
 * Wall Street pares gains on late-day profit-taking
                                
 * Spot gold hits record high on safe-haven appeal
                                
 * Some at Fed saw easy money need beyond 2011-minutes
 (Recasts, updates prices, adds quote)
                                
 By Leah Schnurr
                                
 NEW YORK, April 5 (Reuters) - Prices of spot gold notched a
record high on Tuesday as a downgrade of Portugal's debt
stirred a bid for safety, while Brent crude ended above $122 a
barrel, at a 2-1/2 year high.
                                
 The rise in oil prices on unrest in oil-exporting countries
overshadowed another interest rate hike from China and fed
inflation fears, which supported gold prices. Spot gold <XAU=>
rose to a record high above $1,450 an ounce.
                                
 "What it shows is that big money continues to believe gold
will go higher ... because Bernanke wants to grow at any cost,"
said Axel Merk, portfolio manager of the $600 million Merk
Mutual Funds, referring to Federal Reserve Chairman Ben
Bernanke's comments late on Monday suggesting he was committed
to completing a $600 billion stimulus program as scheduled in
June.
                                
 "The other reason for gold to go up is that there was a
downgrade in Portugal, so people realize there are still some
issues," Merk added.
                                
 The U.S. dollar briefly rose to its highest in more than
five months against the yen and gained versus the euro after
minutes of the Fed's most recent meeting showed some officials
said the central bank should move to tighter conditions before
year-end. The minutes also showed some believed they would have
to hold to an easy monetary policy course beyond this year.
                                
 A large U.S. technology company merger helped keep stocks
afloat, but indexes were dampened by profit-taking late in the
session.
                                
 Texas Instruments Inc <TXN.N> said on Monday it would buy
rival National Semiconductor Corp <NSM.N> for $6.5 billion,
driving National Semiconductor's stock up more than 70 percent.
[ID:nN04281619]
                                
 The deal offset the impact of an interest rate hike by
China, its fourth increase since October. China is viewed as a
main source of global growth. [ID:nL3E7F51LX]
                                
 Shares of Apple Inc <AAPL.O> were down 0.7 percent at
$338.80 after the stock's weighting was cut in a rebalancing of
the Nasdaq 100 index <.NDX>. The rebalancing, which takes
effect May 2, forced some to sell Apple's stock.
                                
 The Dow Jones industrial average <.DJI> was up 4.28 points,
or 0.03 percent, at 12,404.31. The Standard & Poor's 500 Index
<.SPX> was up 0.34 points, or 0.03 percent, at 1,333.21. The
Nasdaq Composite Index <.IXIC> was up 2.09 points, or 0.07
percent, at 2,791.28.
                                
 Global stocks were little changed, with the MSCI
All-Country World Index <.MIWD00000PUS> breaking five straight
days of gains. The index was off 0.1 percent.
                                
 DEBT FEARS
                                
 Rating agency Moody's cut Portugal's sovereign debt by one
notch, saying the incoming government would urgently need to
seek financial aid from the European Union. Portuguese bond
yields rose to euro lifetime highs. [ID:nL3E7F50X6]
                                
 Portugal's leading banks told the central bank on Monday
the country urgently needs a bridge loan and banks have
virtually no more capacity to buy government debt, sources
said. [ID:nLDE7340WP]
                                
 Yields on Portugal's 10-year government bonds <PT10YT=TWEB>
rose as high as 9.033 percent, while Portuguese stocks <.PSI20>
slumped 1 percent. The broader FTSEurofirst 300 index <.FTEU3>,
closed up 0.2 percent.
                                
 It was the highest close for European shares in almost four
weeks, with energy shares rising with oil prices.
                                
 Credit default swaps implied a 41 percent probability of a
Portuguese default within five years, compared with 33 percent
at the end of February, data provider CMA said.
[ID:nLDE7341H4]
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
                                
  Graphics on Thursday's ECB meeting:                     
                                
     http://r.reuters.com/kah88r
                                
  Graphic on euro zone credit ratings:
                                
  http://r.reuters.com/pyh48r
                                
  Graphic on China rate rise:  http://r.reuters.com/veh88r
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 The euro traded at $1.4229, slightly up on the day. The
greenback was last at 84.65 yen, up 0.7 percent.
                                
 Brent crude <LCOc1> prices rose as worries about supply
from oil-producing countries in Africa and the Middle East
overshadowed China's rate hike. Brent futures settled up $1.16
at $122.22 a barrel, while U.S. crude futures <CLc1> were down
32 cents at $108.15.
 (Additional reporting by Nick Olivari, Frank Tang, Mark
Felsenthal and Glenn Somerville; Editing by Dan Grebler)