* U.S., Europe stocks dip; global shares buoyed by Japan
* Euro retreats from 4-1/2-month high vs dollar
* Nikkei futures dip after three days of gains
* Investors eye Libya, Japan
(Updates prices, changes quotes)
By Rodrigo Campos
NEW YORK, March 22 (Reuters) - Markets took a breather on
Tuesday following days of volatility as uncertainty over
fighting in Libya and Japan's earthquake aftermath kept both
stocks and U.S. government debt in a narrow range.
Oil prices edged higher, with Brent briefly above $116 a
barrel after an earlier drop as unrest in Yemen raised concerns
about a further threat to supply.
With little economic data to focus on, investors fretted
over world events such as nuclear reactor damage in Japan and
political instability in the Middle East and North Africa that
has kept oil prices volatile.
The MSCI global stocks index <.MIWD00000PUS> was up 0.3
percent, boosted by an overnight rise in Japanese stocks.
European and U.S. equity benchmarks fell slightly.
Tokyo's Nikkei average <> added 4.4 percent as traders
returned from a national holiday. Reports of progress in
containing radiation leaks at an earthquake-hit nuclear power
plant encouraged traders to buy domestic shares after last
week's losses of more than 10 percent.
U.S. dollar-denominated Nikkei futures <NKc1> were trading
lower after three days of hefty gains.
"There's a relative calmness in markets as investors plot
their next moves, even though we're flying through fog with all
the issues that remain uncertain," said Jeffrey Davis, chief
investment officer at Lee Munder Capital Group in Boston.
Trading volumes remained subdued in Wall Street.
The Dow Jones industrial average <> shed 9.58 points,
or 0.08 percent, to 12,026.95. The Standard & Poor's 500 Index
<.SPX> dropped 3.59 points, or 0.28 percent, to 1,294.79. The
Nasdaq Composite Index <> lost 10.11 points, or 0.38
percent, to 2,681.98.
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U.S. trading volume slowdown http://r.reuters.com/gyp68r
Japan earthquake in graphics http://r.reuters.com/fyh58r
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EURO RETREATS, CRUDE REVERSES LOSSES
In currency markets the euro <EUR=> dipped after hitting
$1.4249 against the U.S. dollar, its highest level since
November, as it ran into what traders said were options-related
barriers.
Still, expectations that the European Central Bank will
hike interest rates next month could limit any downside for the
common currency.
"This, to me, is just a technical pullback," said Joseph
Trevisani, chief market analyst at FX Solutions in Saddle
River, New Jersey.
The dollar also had hit a a 15-month low against other
major currencies <.DXY> but later ticked up.
Reversing earlier losses, U.S. crude <CLc1> rose more than
1 percent to near $104 per barrel while Brent <LCOc1> edged
above $115 as unrest in Yemen threatened to further crimp
energy exports from the Gulf region.
"The situation in the Middle East is still very bullish for
oil," said Phil Flynn, analyst at PFGBEST Research in Chicago.
"The unrest spreading (there) on top of the conflict in Libya
is still the market focus."
U.S. Treasuries were little changed in low volume as
investors looked for further progress in Japan and the Middle
East. U.S. benchmark 10-year Treasury notes <US10YT=RR> were
last down 4/32 in price to yield 3.34 percent.
China's rare earth metal export prices were up almost
ninefold from a year before in February according to Reuters
calculations based on data from China's Customs office. For
details, see []
The hike in export values has coincided with a collapse in
volumes coming out of China, the source of almost all the
world's rare earth supplies. The country has cut export quotas
and raised tariffs on exports, infuriating trading partners.
Shares in U.S. miner Molycorp <MCP.N>, one of the few
companies outside China that are well-placed to capitalize on
the constriction in supply, jumped more than 10 percent.
(Additional reporting by Ryan Vlastelica, Karen Brettell,
Wanfeng Zhou, Joshua Schneyer and Tom Miles; Editing by Andrew
Hay)
