* U.S. share prices rise on M&A activity
* Yen falls on potential monetary easing measures
* Commodities erases losses, notching modest gains
By Daniel Bases
NEW YORK, March 10 (Reuters) - Global stocks rose modestly
on Wednesday with U.S. shares edging higher on merger and
acquisition announcements, while in the currency markets the
British pound weakened after disappointing industrial
production data.
Stocks in Europe held modest gains in listless trade, aided
somewhat by Wall Street's solid open. Japanese and Chinese
benchmark indexes, however, closed with losses.
Gold and oil prices erased losses while the U.S. dollar
slumped against a basket of currencies, falling 0.3 percent at
80.326 <.DXY>.
In early New York trade, the Dow Jones industrial average
<> rose 29.55 points, or 0.28 percent, at 10,593.93. The
Standard & Poor's 500 Index <.SPX> gained 7.53 points, or 0.66
percent, at 1,147.98. The Nasdaq Composite Index <>
climbed 19.34 points, or 0.83 percent.
"We've started to see a pick-up in M&A activity, and that
represents a sign of confidence that chief executive officers
and chief financial officers see better times ahead," said
Michael Sheldon, chief market strategist at RDM Financial in
Westport, Connecticut.
Abbott Laboratories <ABT.N> agreed to buy Facet Biotech
Corp <FACT.O>, which is jointly developing a multiple sclerosis
drug, for $27 a share, topping a failed bid from Biogen Idec
Inc <BIIB.O>. For details, see []
Also, private equity firm Apollo Management reached a deal
to buy Citigroup Inc's <C.N> real estate investment division,
Bloomberg reported. []
World stocks measured in the MSCI All-Country World Index
<.MIWD00000PUS> gained 0.7 percent to 302.66, its best showing
in seven weeks, though they were still up 66 percent from a low
hit one year ago.
The pan-European FTSEurofirst 300 <> index was up
0.64 percent. Investors reversed course, lifting U.S. light
sweet crude oil <CLc1> prices $1.23, or 1.5 percent, to $82.74
per barrel, while spot gold <XAU=> rose $2.60, or 0.23
percent, to $1122.30.
Japan's Nikkei stock index <> fell 0.04 percent while
China's Shanghai Composite index <> lost 0.66 percent,
pressured by concerns over possible monetary tightening ahead
of inflation data due later this week.
YEN AND POUND WEAKEN
The Japanese yen gave up recent gains from corporate
repatriation of offshore earnings amid increasing expectations
the Bank of Japan will adopt further monetary policy easing
measures. []
"In an environment where there is not a definite theme, the
Bank of Japan looms large," said Matthew Strauss, senior
currency strategist at RBC Capital Markets in Toronto.
And "once again the market has turned very bearish on
sterling, and investors are quick to pounce on any negative
news from the UK."
Sterling fell 0.37 percent to $1.4942. Britain's
manufacturing output slumped in January at its sharpest monthly
rate since last August. []
British Prime Minister Gordon Brown said in a speech at
Thomson Reuters in Canary Wharf that the economy was growing,
but the recovery was still in its early stages and remained
fragile.
The euro rose more than 1 percent to a session high 123.62
yen <EURJPY=> while the U.S. dollar was last up 0.9 percent at
90.75 yen <JPY=>. The euro's gains were based more on yen
weakness as the euro zone currency still carries the specter of
the unresolved Greek debt crisis that limits buying
enthusiasm.
Pressure has eased somewhat after Athens last week
announced more austerity measures and secured 5 billion euros
of debt funding from the market.
Greece's debt problems could be seen in the credit markets,
where the premium investors demand to buy U.S. debt over euro
zone benchmark bunds rose to its highest level since mid-2007
on the back of recent strong safe haven flows into Bunds.
The U.S./ German 10 year bond yield spread <US10YT=RR>
<EU10YT=RR> widened to 59 basis points, from around 57 basis
points at midnight on Tuesday.
"The main driver in our view is the Bund yield is
artificially depressed versus Treasuries because of their
safe-haven status within euro govvies," said David Schnautz,
strategist at Commerzbank in Frankfurt.
(Additional reporting by Ryan Vlastelica, Nick Olivari, Umesh
Desai in Hong Kong, Dominic Lau, Tamawa Desai, Atul Prakash and
George Matlock in London; Editing by Padraic Cassidy)
