* World stocks up 0.7 pct, set for 3rd monthly rise
* U.S. stocks mostly higher after deal news, Nasdaq slips
* Brent crude oil near flat
(Updates prices to midday, adds gold and details on Bernanke)
By Caroline Valetkevitch
NEW YORK, Feb 28 (Reuters) - Major stock markets rose on
Monday as worries eased about tensions in Libya, while the
dollar hit a 3-1/2-month low against a basket of major
currencies.
World equities, measured by the MSCI All-Country World
Index <.MIWD00000PUS>, added 0.7 percent, after rising 1.1
percent on Friday. The global index is up 2.3 percent this
month, on track for a third straight monthly rise.
After U.S. stocks turned in their worst performanc since
November last week on worries about high energy prices and the
revolt in Libya, they opened higher on Monday amid optimism
about deal news.
Ventas Inc <VTR.N> said it will buy Nationwide Health
Properties <NHP.N> for $5.8 billion in a stock deal that
strengthens its position as the biggest U.S. owner of senior
housing. NHP shares jumped 9.5 percent to $42.65.
James Bullard, president of the St. Louis Federal Reserve,
gave investors reasons to be optimistic with his comments that
the U.S. economy should do well in 2011 and that oil prices are
not currently a drag on the recovery. His remarks also helped
boost U.S. stocks.
"If oil prices rise further, it will restrain economic
growth, but with no further escalations, at current levels it
isn't going to cause a recession," said Jason Pride, director
of investment strategy at Glenmede Investment and Wealth
Management in Philadelphia.
U.S. stocks are still up substantially for the month, with
the Standard & Poor's 500 <.SPX> on track to gain 3.8 percent.
The blue-chip Dow Jones industrial average and the Nasdaq were
each up about 3 percent for February so far, based on midday
levels in New York.
The market has defied expectations for a major correction,
despite rallying since September and investor anxiety related
to protests in Egypt last month and current problems in Libya.
The S&P 500 is up 26.1 percent since the start of
September.
The dollar, however, came under pressure on expectations
that Fed Chairman Ben Bernanke, in testimony to Congress later
this week, will stick with his recent economic assessment that
the recovery is strengthening, but not enough to bring about a
significant improvement in the jobs market.
The Dow Jones industrial average <> was up 64.78
points, or 0.53 percent, at 12,195.23. The S&P 500 was up 3.75
points, or 0.28 percent, at 1,323.63.
But the Nasdaq Composite Index <> was down 6.38
points, or 0.23 percent, at 2,774.67.
Weighing on Nasdaq was a downgrade by UBS of online
retailer Amazon Inc <AMZN.O> to "neutral" from "buy," due to
higher costs. Amazon was down 2.8 percent at $172.35.
Brent crude oil prices were volatile, following a spike
last week on worries over supply disruption from the Middle
East and North Africa. Brent crude <LCOc1> was up 0.3 percent,
or 30 cents, at $112.44 a barrel.
The uprising in Libya has cut as much as three quarters of
the country's oil output, prompting Saudi Arabia to step in and
plug the supply gap to Libya's oil buyers.
Brent crude is up more than 10 percent this month, heading
toward its sixth straight month of rises. It touched a 29-month
high of near $120 a barrel last week.
Spot gold <XAU=> stayed above $1,400 an ounce, reflectinginvestors' safe-haven bid due to turmoil in the Middle East and
North Africa.
The U.S. dollar fell versus a currency basket as investors
speculated that this week Fed chief Bernanke will signal
continued support for the central bank's quantitative easing
program.
Bernanke is scheduled to testify before key congressional
committees on Tuesday and Wednesday. Expectations are that he
will reiterate his view of an economic recovery that is still
not strong enough to significantly reduce the jobless rate,
suggesting the time is not ripe for U.S. interest rates to
rise.
The ICE futures exchange's U.S. dollar index <.DXY>, which
tracks the greenback's performance against a basket of major
currencies, was down 0.4 percent. Earlier, the indexr hit its
lowest level since Nov. 9.
U.S. Treasuries prices were mixed, with Federal Reserve
purchases and subdued consumer spending in January seen as
supportive.
Commerce Department data showed U.S. consumer spending was
weaker than expected, down 0.1 percent in January, the first
decline in a year.
The yield of the benchmark 10-year U.S. Treasury note
<US10YT=RR> stood at 3.42 percent, unchanged from late last
week.
"Look for (investors) to have 'one foot' in the Treasury
market, and 'one foot' in something offering a higher return,
as investors go back and forth, depending how the wind blows on
some key global issues," said Kevin Giddis, president of fixed
income capital markets at Morgan Keegan in Memphis, Tennessee.
According to fund tracker EPFR Global, a growing aversion
to risky assets in the latest week fueled the biggest flows to
global bond funds in more than three months, and turned more
investors away from emerging market stocks. []
The rotation out of emerging markets into developed
markets, partly driven by inflation concerns in emerging
economies, has led to outperformance in developed markets. The
MSCI emerging market index <.MSCIEF> has lost 4.2 percent this
year.
Credit Suisse's private bank expected the fund rotation to
ease in the second quarter.
In Europe, the pan-European FTSEurofirst 300 index <>
of top shares closed 0.8 percent higher at 1,169.24 points.
Copper prices also rose, helped by a weaker U.S. dollar and
U.S. economic data, including the Midwest business activity
report.
(Additional reporting by Edward Krudy, Ryan Vlastelica, Ellen
Freilich and Wanfeng Zhou in New York; Dominic Lau, Neal
Armstrong, Naomi Tajitsu, Sue Thomas and Rebekah Curtis in
London; Editing by Jan Paschal)
