* World stocks at near 3-week highs, Wall Street up too
* Bonds rise as well on US-Japan rate differentials
* Yen suffers further, hitting fresh 10-month low to euro
* Oil falls on higher stockpiles, US plan to cut imports
(Updates prices)
By Barani Krishnan
NEW YORK, March 30 (Reuters) - World stocks rose to a
almost a three-week high on Wednesday as optimism about the
world economy eclipsed concerns about Japan's nuclear crisis
and turmoil in the oil-rich Arab world.
MSCI's all-country world stock index <.MIWD00000PUS> was up
1.4 percent, taking its year-to-date gains to 3.7 percent and
up more than 6 percent since a post-Japan earthquake low on
March 15. Emerging markets <.MSCIEF> were up 1.4 percent on the
day at a two-month high.
Wall Street was also boosted by data that showed solid
gains in U.S. private sector jobs in March and by merger and
acquisition activity.
The Japanese yen slipped to a 10-month low versus the euro
as recent hawkish comments from euro zone and U.S. officials on
interest rates contrasted with Japan's loose monetary policy
stance.
"It does seem as if markets are now keen to try and turn
the page," said Ben Potter, analyst at IG Markets.
Although the ongoing unrest in Libya, which has shut down
oil exports from the OPEC producer, and Japan's earthquake and
nuclear crises were still affecting financial markets,
investors appeared ready to move on. "There is...appetite to
speculate on these outcomes for now," Potter said.
Some investors continued to seek safe havens, driving up
the price of gold about 1.0 percent to a two day high above
$1,430 an ounce early as the Middle East unrest fed market
jitters, but gains were then lost.
Recent hawkish comments from the euro zone and from U.S.
officials that have contrasted with Japan's loose monetary
policy stance drove the yen to 10-month low versus the euro at
117.28 yen. The euro was seen climbing further on expectations
the European Central Bank will start raising interest rates as
early as April. Against the U.S. dollar, the yen fell to a
near three-week low at 83.19 yen <JPY=>.
"We've had comments from the Fed and a shift in sentiment
towards the U.S. policy from a rate perspective that has really
pushed U.S.-Japan yield differentials, driving the dollar
higher," said Mitul Kotecha, head of global FX strategy at
Credit Agricole in Hong Kong.
The U.S. dollar, meanwhile, accelerated gains against the
euro, hitting session highs at around $1.4050.
Market focus on rate differentials benefited
higher-yielding currencies including the Australian dollar
<AUD=D4>, which traded at $1.03090, near a 29-year high of
$1.0334 hit earlier in the global trading day.
Oil prices fell, with U.S. crude <CLc1> losing almost 1.0
percent to hover just above $104 a a barrel, hurt by swelling
crude oil inventories in the United States and expectations
that the Obama administration will set a long-term target to
cut oil imports.
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Graphic on year-to-date gains across asset classes:
http://r.reuters.com/kyw48p
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ADP JOBS REPORT BOLSTER WALL STREET
U.S. stocks rose after an ADP report on private sector
employment showed the creation of 201,000 private-sector jobs
in March, in line with market expectations. While the report
does not have a high correlation with Friday's closely watched
non-farm payrolls report by the U.S. Labor Department, a good
ADP number can increase optimism on jobs growth.
[]
"Numbers like the ADP report is what we need for the market
to break out of its current range, hopefully it continues on
Friday," said Alan Lancz, president, Alan B. Lancz & Associates
Inc, an investment advisory firm based in Toledo, Ohio.
The Dow Jones industrial average <> was up 74.78
points, or 0.61 percent, at 12,353.79. The Standard & Poor's
500 Index <.SPX> was up 7.07 points, or 0.54 percent, at
1,326.51. The Nasdaq Composite Index <> was up 12.95
points, or 0.47 percent, at 2,769.84.
In the latest of a string of large M&A moves, Canadian
drugmaker Valeant Pharmaceuticals International on Tuesday
<VRX.TO><VRX.N> made an unsolicited bid to buy Cephalon Inc
<CEPH.O> for $5.7 billion, sending the stock up 28 percent to
above $75. U.S.-listed shares of Valeant was up about 9 percent
at above $48, after rising as much as 12 percent to $49.55.
[]
"M&A activity has been very consistent over a broad array
of sectors with incredible premiums, and that's one of the
biggest catalysts for the market's rebound," Lancz said.
The pan-Europe FTSEurofirst 300 <> gained almost 1.0
percent.
Japan's Nikkei average <> climbed 2.6 percent, hitting
its highest level since the post-quake panic sell-off.
U.S. Treasuries prices gained modestly on the jobs report
from ADP and ahead of the Treasury's afternoon sale of
seven-year notes -- the last of this week's three Treasury note
auctions totaling $99 billion.
Benchmark 10-year Treasury notes <US10YT=RR>, which
unchanged before the ADP report, were up 1/32 afterward, their
yields easing to 3.487 percent from 3.495 percent on Tuesday.
Thirty-year bonds <US30YT=RR>, up 2/32 before the report,
were up 3/32 afterward, their yields easing to 4.54 percent
from 4.55 percent on Tuesday.
(Additional reporting by Natsuko Waki, Atul Prakash and Joanne
Frearson; Editing by Leslie Adler)
