* Brent jumps over 2 pct on Libya, lack of OPEC action
* Portugal sells bonds, long-term financing worries remain
* European stocks close down, IBM shares support Dow
(Updates with European markets close, Dow Jones rising)
By Walter Brandimarte
NEW YORK, March 9 (Reuters) - Brent oil prices jumped on
Wednesday as violence threatened Libya's oil infrastructure,
driving world equities lower on fears over the impact to the
economic recovery.
U.S. Treasuries prices were boosted by a safety bid
following the sale of Portuguese debt at unsustainable high
yields.
In European equities, mining stocks were among the biggest
losers as prices of key base metals fell on worries that demand
for raw materials could be hit if economic growth slowed.
On Wall Street, however, the Dow Jones clawed back into
positive territory with a jump in IBM shares on its outlook for
a near-doubling in earnings by 2015.
Brent oil <LCOc1> jumped more than 2 percent to $115.50 a
barrel as fighting in Libya intensified and OPEC saw no need
for an emergency meeting to consider raising oil output.
Worries that the unrest could spread into the Middle East also
left investors jittery.
"It's a fear trade," said Michael Hewson, an analyst at CMC
Markets. "It's about the fear of these troubles escalating --
there is some concern about how the Saudi Day of Rage will go
on Friday."
Activists in Saudi Arabia have set up Facebook pages
calling for protests on March 11 and 20.
Expectations that the Organization of the Petroleum
Exporting Countries would respond to the decline in Libya's
output by rising production had driven oil prices lower on
Tuesday, one day after they hit a 2-1/2-year high.
In New York, however, U.S. crude oil futures <CLc1>
seesawed between gains and losses as investors eyed both the
violence in Libya and a greater-than-expected rise in U.S.
stockpiles last week. Oil in New York was little changed at
$104.95 a barrel.
World stocks fell, with the MSCI world equity index
<.MIWD00000PUS> down 0.12 percent at 343.19 points and the
Thomson Reuters global stock index <.TRXFLDGLPU> off 0.03
percent at 133.23 points.
European equities fell on the fears that rising oil prices
could hurt the economy and fan inflation. The FTSEurofirst 300
<> index of top European shares closed down 0.23 percent
at 1,144.75 points, after rising to a high of 1,153.62 during
the session.
On Wall Street the Dow Jones inched higher as IBM <IBM.N>
shares soared 2.8 percent, to $166.86. A number of analysts
raised their target price for the tech giant's stock after the
company reaffirmed its 2015 profit target on Tuesday.
[]
The Dow Jones industrial average <> gained 23.16
points, or 0.19 percent, to 12,237.54, while the Standard &
Poor's 500 Index <.SPX> was down 0.22 points, or 0.02 percent,
at 1,321.60. The Nasdaq Composite Index <> fell 9.25
points, or 0.33 percent, to 2,756.52.
PORTUGAL IN NEED
Prices of U.S. government bonds rose as investors moved to
safe-haven assets after an auction of Portuguese debt reminded
them of the financial troubles of peripheral euro zone
countries.
Benchmark 10-year U.S. Treasury notes <US10YT=RR> rose 3/32
in price, with the yield at 3.5346 percent.
Portugal was able to sell 1 billion euros in two-year bonds
at an auction, but its cost of borrowing was the highest since
it joined the euro. Lisbon said such yields were unsustainable
in the long run without Europe-wide action.
"The auction was always going to go OK ... but I don't
think clients are particularly interested in buying the bond,"
said a trader in London. "The problems remain -- we've got the
the March 25 summit coming up, we've got continued selling in
Greece."
Euro zone leaders meet ahead of the summit on Friday. The
bloc's 17 heads of state are expected to agree the next
cautious steps in their year-long effort to quell the region's
debt crisis but the meeting is unlikely to produce a
breakthrough. []
The euro fell from an earlier high and traded practically
flat against the dollar as expectations of a euro-zone interest
rate hike next month faded somewhat.
Investors worry that a monetary policy tightening by the
European Central Bank would raise borrowing costs even higher
for peripheral euro zone economies.
The European single currency <EUR=> was practically
unchanged at $1.3903, falling from an earlier four-month high
of $1.4036 on electronic trading platform EBS.
Gold was little as investors booked profits, erasing
earlier gains driven by the unrest across North Africa and the
Middle East and the renewed worries over euro zone debt.
Spot gold <XAU=> eased 0.1 percent to $1,425.70 an ounce by
11:37 a.m. EST (1637 GMT). U.S. gold futures for April delivery
<GCJ1> lost $1.80 an ounce to $1,425.40.
Copper fell 3 percent as the strengthening crude oil prices
kept investors worried that inflationary pressures could hit
economic growth and demand for industrial metals.
Copper for three-months delivery <CMCU3> on the London
Metal Exchange closed at $9,275 a tonne, down from a close of
$9,530 a tonne on Tuesday.
(Additional reporting by Kirsten Donovan, Karen Brettell,
Edward Krudy, Claire Milhench; Editing by Leslie Adler)
