GLOBAL MARKETS-World stocks near 3-wk highs; data boosts Wall St

* World stocks at near three-week highs, Wall Street up

* yen suffers further

* Bonds rise as well

* Oil falls on higher stockpiles, US plan to cut imports
(Recasts and updates with U.S. market open; dateline
previously LONDON)

By Barani Krishnan

NEW YORK, March 30 (Reuters) – World stocks rose to near
three-week highs on Wednesday and U.S. stocks climbed in early
trade as optimism about potential gains in the coming quarter
eclipsed concerns about Japan’s nuclear crisis and turmoil in
the oil-rich Arab world.

Wall Street was also boosted by data that showed solid
gains in private sector jobs in March and by merger and
acquisition activity.

The yen slipped to a 10-month low versus the euro and was
broadly weaker as recent hawkish comments from euro zone and
U.S. officials contrasted with Japan’s loose monetary policy

“It does seem as if markets are now keen to try and turn
the page,” said Ben Potter, analyst at IG Markets.

Although the ongoing unrest in Libya, which has shut down
oil exports from the OPEC producer, and Japan’s earthquake and
nuclear are still affecting financial markets in a big way,
investors appeared ready to move on from these crises. “There
is…appetite to speculate on these outcomes for now,” Potter

Some investors continued to seek safe havens, driving up
the price of gold about 1 percent as the Middle East unrest fed
market jitters. Gains were capped by expectations that monetary
policy in Europe and the United States may tighten.

Recent hawkish comments from the euro zone and from U.S.
officials that have contrasted with Japan’s loose monetary
policy stance drove the yen to 10-month low versus the euro of
117.28 yen. The euro was seen climbing further on expectations
the European Central Bank will start raising interest rates as
early as April.

Against the dollar, the yen fell to a near three-week low
at 83.19 yen (JPY=: Quote, Profile, Research).

“We’ve had comments from the Fed and a shift in sentiment
towards the U.S. policy from a rate perspective that has really
pushed U.S.-Japan yield differentials, driving the dollar
higher,” said Mitul Kotecha, head of global FX strategy at
Credit Agricole in Hong Kong.

The market’s focus on rate differentials benefited
higher-yielding currencies including the Australian dollar
(AUD=D4: Quote, Profile, Research), which traded at $1.03090, near a 29-year high of
$1.0334 hit earlier in the global trading day.

Oil prices fell, with U.S. crude (CLc1: Quote, Profile, Research) losing almost half
a percent to hover below $104.50 a a barrel, hurt by swelling
crude inventories in the United States and expectations that
the Obama administration will set a long-term target to cut oil


Graphic on year-to-date gains across asset classes:



U.S. stocks rose after an ADP report on private sector
employment show a creation of 201,000 private-sector jobs in
March, in line with market expectations. While the report
doesn’t have a high correlation with Friday’s closely watched
non-farm payrolls report by the U.S. Labor Department, a good
ADP number can increase optimism on jobs growth.

“Numbers like the ADP report is what we need for the market
to break out of its current range, hopefully it continues on
Friday,” said Alan Lancz, president, Alan B. Lancz & Associates
Inc, an investment advisory firm based in Toledo, Ohio.

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 44.58
points, or 0.4 percent, at 12,323.59. The Standard & Poor’s 500
Index (.SPX: Quote, Profile, Research) was up 5.94 points, or 0.5 percent, at 1,325.38.
The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 13.71 points, or 0.5
percent, at 2,770.60.

In the latest of a string of large M&A moves, Canadian
drugmaker Valeant Pharmaceuticals International on Tuesday
(VRX.TO: Quote, Profile, Research)(VRX.N: Quote, Profile, Research) made an unsolicited bid to buy Cephalon Inc
(CEPH.O: Quote, Profile, Research) for $5.7 billion, sending the stock up 28 percent to
$75.21 while U.S.-listed shares of Valeant rose 12 percent to
$49.55. [ID:nN29299668]

“M&A activity has been very consistent over a broad array
of sectors with incredible premiums, and that’s one of the
biggest catalysts for the market’s rebound,” Lancz said.

MSCI’s all-country world stock index (.MIWD00000PUS: Quote, Profile, Research) was up
0.9 percent, taking its year-to-date gains to 3.7 percent and
up more than 6 percent since a post-Japan earthquake low on
March 15.

Emerging markets (.MSCIEF: Quote, Profile, Research) were up 1.3 percent on the day
at a two-month high.

The pan-Europe FTSEurofirst 300 (.FTEU3: Quote, Profile, Research) gained almost 1

Japan’s Nikkei average (.N225: Quote, Profile, Research) climbed 2.6 percent, hitting
its highest level since the post-quake panic sell-off.

U.S. Treasuries prices gained modestly on the jobs report
from ADP and ahead of the Treasury’s afternoon sale of
seven-year notes — the last of this week’s three Treasury note
auctions totaling $99 billion.

Benchmark 10-year Treasury notes (US10YT=RR: Quote, Profile, Research), which
unchanged before the ADP report, were up 1/32 afterward, their
yields easing to 3.487 percent from 3.495 percent on Tuesday.

Thirty-year bonds (US30YT=RR: Quote, Profile, Research) ,up 2/32 before the report,
were up 3/32 afterward, their yields easing to 4.54 percent
from 4.55 percent on Tuesday.
(Additional reporting by Natsuko Waki, Atul Prakash and Joanne
Frearson; Editing by Leslie Adler)

GLOBAL MARKETS-World stocks near 3-wk highs; data boosts Wall St