* Oil recedes as Saudis boost output to quell Libya fears
* US dollar trims gain vs euro, slips vs yen on GDP report
* US bonds pare losses after revised U.S. GDP data
(Adds opening of U.S. markets, changes byline, dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Feb 25 (Reuters) - Stocks in major markets
rallied and crude oil prices eased on Friday after Saudi Arabia
boosted oil output to calm fears of supply disruptions sparked
by the uprising in Libya.
The Saudi move to increase oil output by more than 700,000
barrels daily, according to an industry source familiar with
the kingdom's production, offset a bearish government report
that showed slower than expected fourth-quarter U.S. economic
growth. For details on increased Saudi output see:
[]
The U.S. dollar rebounded against the euro, lifted by the
retreat in crude oil and news that U.S. consumer sentiment rose
to its highest in three years in February. []
The euro <EUR=> was down 0.43 percent at $1.3744.
Consumer sentiment rose to 77.5, up from 74.2 in January,
and the highest since January 2008, according to the Thomson
Reuters/University of Michigan survey.
Events in North Africa and the Middle East still grabbed
the spotlight even as oil prices retreated from 2-1/2 year
peaks of almost $120 a barrel in London on Thursday to hover at
less than $112 on Saudi efforts to plug any supply gaps.
[]
"We have started producing over 9 million barrels per day.
We have a lot of production capacity," the industry source told
Reuters.
ICE Brent crude futures <LCOc1> in London were up 31 cents
at $111.67 after briefly trading negative on the day. U.S.
light sweet crude oil <CLc1> fell 7 cents to $97.21.
"The tensions in the Middle East seem to be less at the
forefront of the market's mind. The initial panic seems to have
subsided a bit," said Phil Gillett, a trader at Spreadex.
Stocks in Europe rose more than 1 percent and Wall Street
was firmly higher.
"We got a little bit oversold in a very short period of
time this week so it's normal to get this kind of a rebound,"
said James Dailey, portfolio manager of TEAM Asset Strategy
Fund in Harrisburg, Pennsylvania.
"The market is likely to bounce a little more, but not too
much since there is still more to the downside after such a
strong rally and ongoing geopolitical concerns."
The FTSEurofirst 300 <> index of top European shares
was up 1.3 percent and world equities measured by MSCI's
all-country world index <.MIWD00000PUS> rose almost 1 percent.
The Dow Jones industrial average <> was up 66.91
points, or 0.55 percent, at 12,135.41. The Standard & Poor's
500 Index <.SPX> was up 11.37 points, or 0.87 percent, at
1,317.47. The Nasdaq Composite Index <> was up 32.02
points, or 1.17 percent, at 2,769.92.
U.S. Treasury debt prices were little changed as investors
kept a wary eye on Libya in case events there spur further
safe-haven buying. []
Early price losses were pared after U.S. gross domestic
product was revised lower to an annualized rate of 2.8 percent,
down from an initial 3.2 percent estimate.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
1/32 in price to yield 3.44 percent.
German bond prices fell as oil prices retreated and after
an Italian auction of 9.5 billion euros worth of debt attracted
decent demand.
The Bund future <FGBLc1> was last 27 ticks down on the day
at 124.14.
Gold prices rose above $1,400 an ounce and were on track
for a fourth straight week of gains, supported by interest in
the metal as a haven from risk as violence flared in Libya.
[]
Spot gold prices <XAU=> rose $7.55 to $1,407.30 an ounce.
The Libyan coastal town of Zawiyah was under the control of
anti-government protesters, a witness said, bringing a popular
uprising against Muammar Gaddafi within 50 kilometers of the
capital Tripoli. []
(Reporting by Angela Moon, Gertrude Chavez-Dreyfuss and Chris
Reese in New York; Ikuko Kurahone, Nia Williams, Emelia
Sithole-Matarise and Jan Harvey; Writing by Herbert Lash,
Editing by Chizu Nomiyama)
