* 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 Treasuries prices rising further after auction)
By Walter Brandimarte
NEW YORK, March 9 (Reuters) - Brent oil prices jumped on
Wednesday, weighing on global stocks, as escalating violence in
Libya increased fears higher energy costs could choke the
global economic recovery.
U.S. Treasuries prices were boosted by a safety bid
following the sale of Portuguese debt at unsustainably high
yields. Demand for safe-haven assets also translated into
strong demand in an auction of 10-year Treasuries.
Mining stocks led European equity markets lower as prices
of key base metals fell on worries 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. The tech giant's
stock reached an all-time high one day after it promised to
nearly double its profit by 2015. For details, see
[]
Brent oil <LCOc1> jumped more than 2 percent to $115.65 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 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 All-Country World Index
<.MIWD00000PUS> down 0.11 percent at 343.22 points.
European equities fell on fears 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 2.7 percent, to $166.65. A number of analysts
raised their target price for the tech giant's stock after the
company reaffirmed its profit target. []
The Dow Jones industrial average <> was little changed
at 12,214.68, while the Standard & Poor's 500 Index <.SPX> was
down 2.63 points, or 0.2 percent, at 1,319.19. The Nasdaq
Composite Index <> fell 17.75 points, or 0.64 percent, to
2,748.02.
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.
U.S. benchmark 10-year Treasury notes <US10YT=RR> rose
21/32 in price, with the yield at 3.4675 percent. Prices rose
further after the high yield in an auction of $21 billion of
reopened 10-year notes came in below market expectations.
Portugal was able to sell 1 billion euros in two-year bonds
at an auction but its borrowing cost 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
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 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 $1.3906, falling from an earlier four-month high
of $1.4036 on electronic trading platform EBS.
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 Andrew Hay)
