* U.S., Europe stocks dip; global shares buoyed by Japan
* Euro retreats from 4-1/2-month high versus dollar
* Nikkei futures dip after three days of gains
* U.S. crude up 2 pct as unrest escalates in Yemen
(Recasts; updates prices)
By Rodrigo Campos
NEW YORK, March 22 (Reuters) - U.S. crude prices jumped on
Tuesday as unrest in Yemen raised concerns about a further
threat to supply from the Gulf area with Libya's flow also
crippled by a standoff between rebels and the government.
The U.S. dollar was unchanged near 15-month lows versus a
basket of currencies, further supporting oil prices which
reversed an earlier drop.
Adding to days of unrest in Libya, investors fretted as
thousands of Yemeni protesters took to the streets clamoring
for President Ali Abdullah Saleh to step down. Several top
officials have already abandoned Saleh, who warned his country
would descend into civil war if he were forced to quit. For
details see [].
"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."
Volatility eased in other markets as uncertainty over
fighting in Libya, unrest in Yemen and Japan's earthquake
aftermath kept both stocks and U.S. government debt in a narrow
range. Europe's main equity benchmark <> closed 0.06
percent lower after hitting a one-week high on Monday.
U.S. stocks slipped but the MSCI global stocks index
<.MIWD00000PUS> was up 0.3 percent, buoyed by an overnight rise
in Japanese stocks.
Tokyo's Nikkei average <> added 4.4 percent as traders
returned from a national holiday, but 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 <> dipped 19.72
points, or 0.16 percent, to 12,016.81. The Standard & Poor's
500 <.SPX> lost 4.44 points, or 0.34 percent, to 1,293.94. The
Nasdaq Composite <> fell 9.07 points, or 0.34 percent, to
2,683.02.
The CBOE volatility index <.VIX> edged 1.6 percent lower to
20.28 after a near 16 percent drop on Monday.
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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 versus 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 2 percent
to $104.39 per barrel while Brent <LCOc1> added 0.6 percent.
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 2/32
in price to yield 3.33 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.
[].
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 12 percent.
(Additional reporting by Ryan Vlastelica, Karen Brettell,
Wanfeng Zhou, Joshua Schneyer and Tom Miles; Editing by Andrew
Hay)
