* Euro above $1.42 on rate hike expectations
* Wall Street stocks boosted by AT&T's T-Mobile deal
* U.S.-traded Nikkei futures up 3.6 percent
* VIX posts largest daily drop since May
(Updates to U.S. markets' close)
By Rodrigo Campos
NEW YORK, March 21 (Reuters) - Global stocks rose on Monday
as risk appetite returned after Japan had some success
controlling a crippled nuclear plant, while the yen slipped on
speculation of further market intervention.
Japan's markets were closed for a holiday, but the MSCI
index of Asian stocks outside of Japan <.MIAPJ0000PUS> rose
1.35 percent and U.S.-traded Nikkei futures gained more than 3
percent for a third straight session.
The yen fell on investor concerns over more coordinated
actions by the world's major central banks to weaken the
Japanese currency following last week's intervention by the
Group of Seven.
Oil prices were higher as unrest in the Middle East
intensified concerns about potential threats to the region's
oil supply and U.N.-mandated air strikes kept OPEC-member
Libya's output reduced. For details see [].
But in a sign U.S. stock markets were returning to normal
after Japan's earthquake, tsunami and nuclear crisis, Wall
Street's so-called fear gauge posted its largest daily
percentage drop since May.
U.S. stocks closed 1.5 percent higher as investors welcomed
AT&T Inc's <T.N> $39 billion offer to buy T-Mobile USA from
Deutsche Telekom <DTEGn.DE> in what would be the world's
biggest deal this year and Germany's biggest in a decade.
"The market has been really volatile and it will continue
to be really volatile. The AT&T deal is just a piece of it, the
other is a sense there is some better news out of Japan and
things haven't gotten any worse in Africa," said Gail Dudack,
chief investment strategist at Dudack Research Group in New
York.
The Dow Jones industrial average <> gained 178.01
points, or 1.5 percent, to 12,036.53. The Standard & Poor's 500
<.SPX> added 19.18 points, or 1.5 percent, to 1,298.38. The
Nasdaq Composite <> gained 48.42 points, or 1.83 percent,
to 2,692.09.
The third day of gains in U.S. stocks followed two weeks of
losses over concerns about unrest in oil-producing North Africa
and the Middle East.
"The effects on oil from Libya to the US are very modest,
if (any) at all," Dudack said. "The Saudis are making up the
difference (in output) so it comes down more to politics than
economics in Libya."
Experts said Japan's reconnection of power to its
earthquake-damaged reactors is a major step in managing its
nuclear crisis, but two smoking reactors and worries about food
safety showed the crisis was far from over. For details, see
[]
Investors were concerned how a struggling Japanese economy
could affect the global recovery, and volatility was expected
in the coming days.
Japanese equities got a boost after billionaire investor
Warren Buffett said the earthquake was the kind of
extraordinary event that creates a buying opportunity for
shares in Japanese companies. []
U.S. dollar-denominated Nikkei futures <NKc1> rose 3.2
percent, pointing to a higher stock market open on Tokyo on
Tuesday. The futures have gained 11.8 percent in the last three
sessions.
The FTSEurofirst 300 <> index of top European shares
rose 1.75 percent to hit a one-week high and the MSCI world
share index <.MIWD00000PUS> jumped 1.58 percent, the largest
daily gain in seven weeks.
The CBOE volatility index <.VIX> tumbled 15.7 percent in
its largest daily percentage drop since last May.
YEN SLIPS, EURO HITS 4-MONTH HIGH
The yen slipped with speculators wary of more coordinated
actions by central banks after joint G7 intervention last week.
The U.S. dollar rose 0.3 percent for the day to 81.06 yen
<JPY=>.
The euro <EUR=> rose 0.3 percent, trading above $1.42
against the U.S. dollar for the first time since November as
markets braced for a euro zone interest rate hike as soon as
next month.
A measure of the greenback against a basket of major
currencies fell to its lowest in more than 15 months.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Libya Graphics
http://link.reuters.com/neg68r
Japan disaster in figures
http://r.reuters.com/ser58r
Japan disaster Top News page
[]
Picture, graphic packages:
http://r.reuters.com/wyb58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
OIL RISES, TREASURIES YIELDS TICK UP
Brent crude for May delivery <LCOc1> was up more than 80
cents at $114.77 a barrel after the attacks on Libya, aimed at
protecting civilians caught up in a revolt against the nation's
leader, Muammar Gaddafi. []
Brent has risen nearly 22 percent this quarter.
U.S. Treasuries prices were hurt by reduced safe-haven
demand and extended losses after the Treasury said it will
begin to sell $142 billion of its agency-guaranteed
mortgage-backed securities. []
Benchmark 10-year notes <US10YT=RR> were last down 15/32 in
price to yield 3.32 percent, up from 3.28 percent late Friday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
* For Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting
* For the MacroScope blog http://blogs.reuters.com/macroscope
* For hedge fund blog http://blogs.reuters.com/hedgehub
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Additional reporting by Wanfeng Zhou, Nick Olivari, Chuck
Mikolajczak, Emily Flitter, Karen Brettell and Robert Gibbons;
Editing by Kenneth Barry)
