* Mubarak's resignation revives some risk appetite
* Stocks rise, oil falls, gold and Treasuries trim gains
* Dollar briefly pares losses but remains broadly strong
(Updates with European markets' close)
By Walter Brandimarte
NEW YORK, Feb 11 (Reuters) - Oil prices fell and world
stocks rose modestly on Friday after Egyptian President Hosni
Mubarak stepped down following more than two weeks of popular
unrest that roiled financial markets.
Prices of gold and U.S. Treasury bonds erased some of their
gains as Mubarak's departure partially revived investors'
appetite for risk. Many were still concerned, however, about
the transfer of power in Egypt and potential new uprisings in
other Middle Eastern countries impacting oil prices.
The uncertainty kept the U.S. dollar strong against other
major currencies. Also supporting the greenback was data
showing the U.S. economic recovery is gaining traction.
"Initially you'll see a pop in the market and oil come off
on the hope that this prevents violence in the streets of
Egypt. But as we go forward, we'll start wondering what's next
for the country," said Jay Suskind, senior vice president at
Duncan-Williams in Jersey City.
Mubarak ceded power to a military council, which will run
the affairs of the Arab world's most populous nation. A free
and fair presidential election has been promised for September.
For details, see [].
U.S. crude oil <CLc1> prices, which had been rising on
fears of potential disruptions in supply from the Middle East,
fell $1.18, or 1.36 percent, to $85.55 per barrel.
Key U.S. stock indexes erased early losses to trade with
modest gains.
The Dow Jones industrial average <> was nearly flat at
12,229.82 while the Standard & Poor's 500 Index <.SPX> rose
1.77 points, or 0.13 percent, to 1,323.64. The Nasdaq Composite
Index <> climbed 5.96 points, or 0.21 percent, to
2,796.41.
In Europe, the FTSEurofirst 300 <> index of top
shares closed 0.41 percent higher. MSCI's benchmark All-Country
World Index <.MIWD00000PUS> was little changed at 340.83
points.
"It looks like the stock market is taking the news well,"
said Gary Thayer, chief macro strategist with Wells Fargo in
St. Louis.
"One thing that has weighed on investor sentiment is that
the price of oil would go up in the case of political turmoil,
and Mubarak's leaving reduces that possibility."
Despite a slight return in risk appetite, the dollar kept
gains. It was rising 0.46 percent against a basket of major
currencies, according to the U.S. Dollar Index <.DXY>. Against
the Japanese yen, it <JPY=> rose 0.29 percent to 83.50.
A survey showing U.S. consumer sentiment rose to its
highest level in eight months in early February also supported
the greenback as it suggested the U.S. economic recovery was on
track. Stronger economic growth may eventually translate into
higher Treasuries yields and boost the appeal of the dollar.
The euro <EUR=> fell 0.61 percent to $1.351, also pressured
by a fresh bout of concerns about the euro zone sovereign debt
crisis.
"There are bigger things driving the euro right now," said
Brian Dolan, chief currency strategist at Forex.com in
Bedminster, New Jersey.
"The concerns most heavily weighing on the euro -- the
ongoing debt crisis -- are still there, and for now, the
downside is still in play," he said.
U.S Treasury prices shed some gains after Mubarak's
resignation, but benchmark 10-year notes <US10YT=RR> were still
up 15/32 in price, with the yield at 3.6457 percent.
(Additional reporting by Rodrigo Campos, Richard Leong and
Steven C. Johnson; Editing by Kenneth Barry)
