(Repeats to add dropped word "debt" in lead to read U.S.
government debt)
* U.S., Europe stocks dip; global shares buoyed by Japan
* Euro retreats from 4-1/2-month high versus dollar
* Nikkei futures dip after hefty gains
* Investors eye Libya, Japan
(Recasts, updates prices, adds gold, Nikkei futures; drops
London from dateline)
By Rodrigo Campos
NEW YORK, March 22 (Reuters) - Markets took a breather on
Tuesday after days of volatility, as uncertainty over the
fighting in Libya kept both stocks and U.S. government debt in
a narrow range
Oil prices edged higher, with Brent trading above $115
after an earlier drop as unrest in Yemen raised concerns about
a further threat to supply from the Gulf region.
The euro retreated from a 4-1/2-month high against the
dollar but expectations that the European Central Bank will
hike interest rates next month could limit any downside for the
currency.
Economic data has taken a back seat to world events as
investors fretted over the extent of nuclear reactor damage in
quake-stricken Japan, while political instability in the Middle
East and North Africa has kept oil prices volatile.
The MSCI global stocks index <.MIWD00000PUS> was up 0.2
percent, boosted by an overnight rise in Japanese stocks, but
European and U.S. equity benchmarks fell slightly.
Tokyo's benchmark Nikkei average <> added 4.4 percent
as traders returned from a national holiday. Progress in
attaching power cables at the stricken nuclear plan encouraged
traders to buy domestic shares after last week's losses of more
than 10 percent. Later in the day, U.S. dollar-denominated
Nikkei futures <NKc1> dipped after three days of gains.
"There is a lot of volatility and a lot of uncertainties
surrounding Japan and Libya," said Tim Ghriskey, chief
investment officer at Solaris Asset Management in Bedford
Hills, New York.
"Neither one of the situations looks quite ready to settle
down yet and that could drag out for some time and weigh on the
market."
The Dow Jones industrial average <> dropped 11.43
points, or 0.09 percent, to 12,025.10. The Standard & Poor's
500 <.SPX> fell 2.87 points, or 0.22 percent, to 1,295.51. The
Nasdaq Composite <> lost 6.89 points, or 0.26 percent, to
2,685.20.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Dollar index weekly trendline: http://r.reuters.com/jum68r
Graphic on intervention: http://link.reuters.com/sub68r
Earthquake in graphics http://r.reuters.com/fyh58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
EURO RETREATS, GOLD UP
In currency markets the euro <EUR=> dipped after hitting
$1.4249 versus the U.S. dollar, its highest level since
November, as it ran into what traders said were options-related
barriers.
The dollar also had hit a a 15-month low against other
major currencies <.DXY>but later ticked up.
Gold <GCc1> was on track for a fifth day of gains, fed by
investor demand for safe-haven assets as traders eyed Libya and
unrest in the Middle East.
In addition to turmoil in the Middle East, oil prices were
boosted by the weakened dollar. U.S. crude <CLc1> rose nearly 1
percent above $103 per barrel.
U.S. Treasuries were little changed in low volume as
investors looked for further progress in Japan and the Middle
East. Benchmark 10-year notes <US10YT=RR> were last down 4/32
in price to yield 3.34 percent.
(Additional reporting by Steven C. Johnson, Wanfeng Zhou,
Angela Moon, Jeremy Gaunt, Jessica Mortimer, Rujun Shen, Joanne
Frearson, Nia Williams and Alejandro Barbajosa; Editing by
Leslie Adler)
