GLOBAL MARKETS-Stocks, euro gain as economic outlook brightens

* Stocks rise as fear of Mideast, other tensions subside

* Euro flat as monetary policy trumps Merkel party loss

* Brent oil gains as rebels advance on oil towns in Libya
(Adds fresh prices)

By Herbert Lash

NEW YORK, March 28 (Reuters) – Global stocks rose on signs
of a brighter economic outlook while the euro rose against the
dollar on Monday after concerns eased following the rout of
German Chancellor Angela Merkel’s party in elections.

Growing speculation that the European Central Bank will
raise interest rates as early as next month supported the euro,
which climbed to a session peak of $1.4115 after data on
contracts for U.S. home sales for February showed an unexpected
rise.

The National Association of Realtors said its Pending Home
Sales Index, based on contracts signed in February but not yet
closed, rose 2.1 percent to 90.8. Economists had expected the
index, which leads existing home sales by a month or two, to
fall 1.0 percent. For details see: [ID:nWALSEE73Y].

Global stocks gained as an upgrade of U.S. telecom shares
and a rise in U.S. consumer spending in February lifted
sentiment.

U.S. consumer spending rose slightly more than forecast as
households tapped their savings to cover higher food and energy
prices, while inflation accelerated at its fastest pace since
June 2009. [ID:nCAT005399]

While Japan’s nuclear disaster and civil unrest in the
Middle East and North Africa still hang over markets, much of
the losses over recent weeks have been recouped.

“To some degree investors have become used to the bad news
that’s out there, and things continue to look good
domestically,” said Bruce McCain, chief investment strategist
at Key Private Bank in Cleveland.

The S&P telecom sector (.GSPL: Quote, Profile, Research) rose 1.3 percent after
Robert W. Baird upgraded a number of telecoms to “outperform,”
including Dow members AT&T Inc (T.N: Quote, Profile, Research) and Verizon Communications
Inc (VZ.N: Quote, Profile, Research), saying AT&T’s deal to buy T-Mobile would help
stabilize the hyper-competitive industry. [ID:nL3E7ES19O]

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 21.04
points, or 0.17 percent, at 12,241.63. The Standard & Poor’s
500 Index (.SPX: Quote, Profile, Research) was up 1.98 points, or 0.15 percent, at
1,315.78. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 3.02
points, or 0.11 percent, at 2,746.08.

The FTSEurofirst 300 (.FTEU3: Quote, Profile, Research) index of top European shares
was up 0.1 percent at 1.125.65 points.

Brent crude rebounded as rebels regained control of key oil
towns in Libya. [ID:nL3E7ES07Y]

North Sea Brent for May delivery (LCOc1: Quote, Profile, Research) rose 18 cents to
$115.77 a barrel.

U.S. Treasuries slipped as traders trimmed positions to
make way for new supply and looked ahead to mid-year when the
Federal Reserve’s program of buying Treasuries is set to end.

The government data showing U.S. personal spending and
inflation accelerated in February also weighed on prices.

The benchmark 10-year U.S. Treasury note (US10YT=RR: Quote, Profile, Research) pared
some losses, off 5/32 in price to yield 3.46 percent.

The dollar was down against a basket of trading-partner
currencies, with the U.S. Dollar Index (.DXY: Quote, Profile, Research) off 0.16 percent
at 76.097.

The loss by Merkel’s party in Baden-Wuertemberg, which the
conservatives had held for nearly six decades, led markets to
bet the chancellor will have less leeway to shore up
financially stricken members of the single currency bloc.

But expectations of a euro-zone interest rate rise continue
to offset worries about heavily indebted Portugal and Spain.

ECB President Jean-Claude Trichet said inflation rates are
above its price stability target. [nWEA1186][ID:nLDE72Q0E6]

Spot gold (XAU=: Quote, Profile, Research) rose to $1,415.90 an ounce.
(Reporting by Ryan Vlastelica, Julie Haviv and Ellen Freilich
in New York; Kirsten Donovan and Claire Milhench in London;
Writing by Herbert Lash; Editing by Leslie Adler)

GLOBAL MARKETS-Stocks, euro gain as economic outlook brightens