* U.S., European shares rise after recent sell-off
* Brent crude falls again on global demand concerns
* Euro rises vs dollar on ECB comment on bond program
* Investors pare safe-haven holding in gold, bonds
By Richard Leong
NEW YORK, April 11 (Reuters) - U.S. and European equities
rebounded on Wednesday after a string of heavy losses that had
been stoked by fears over a weakening global economy, but
worries about the economy continued to dog oil prices, which
fell for a third straight day.
Investors scaled back on holdings of safe-haven of gold and
U.S. and German government debt as they tiptoed back into
riskier investments.
Record low auction yields for Germany's new 10-year bond
compounded the sell-off in Treasuries and Bunds. The ultra-low
yields soured demand for the euro zone benchmark despite fears
that Spain or another heavily indebted euro zone nation might
need a bailout.
But the euro managed to strengthen against the dollar after
a member of the European Central Bank's Executive Board said the
bank's bond-buying program remains an option as the euro zone
continues to struggle to contain its debt crisis.
"The market action today tells you how sensitive investors
are to yield levels and positive comments from the ECB, even
though the central bank's comments were somewhat vague," said
Steven Englander, head of G10 strategy at CitiFX, a division of
Citigroup.
"At the end of the day it seems clear that policymakers are
very interested in keeping the asset market rally going and will
do what is needed."
In equity markets, Wall Street stocks bounced back after
five days of sharp losses.
In late morning trading, the Dow Jones industrial average
was up 90.48 points, or 0.71 percent, at 12,806.41. The
Standard & Poor's 500 Index was up 11.98 points, or 0.88
percent, at 1,370.57. The Nasdaq Composite Index was up
33.96 points, or 1.14 percent, at 3,025.18.
The S&P had marked its largest daily percentage decline in
four months on Tuesday. It ended below its 50-day moving average
for the first time since December, a level that provided
technical resistance in Wednesday's rebound.
"I see it as normal for the market to take a break after its
best first quarter since 1998. If that's the only blip we see,
it was pretty shallow," said Bruce Zaro, chief technical
strategist at Delta Global Asset Management in Boston.
Shares of aluminum producer Alcoa Inc rose 7 percent
to $9.968, a day after the Dow component surprised Wall Street
by reporting a first-quarter profit.
"I don't think Alcoa earnings are going to set the tone and
turn this around, but earnings expectations have been raised a
bit, analysts had gotten a bit too pessimistic," Zaro said.
U.S.-traded shares of Nokia tumbled 14 percent after
the mobile phone maker warned its phone business would post
losses in the first two quarters this year, as it struggles to
revamp its product line.
Year-to-date, the S&P is up 9.1 percent, the Dow is up 4.98
percent and the Nasdaq is up 16.2 percent
The FTSEurofirst 300 index of top European shares
unofficially closed 0.6 percent higher at 1,032.54 points, after
losing 5.4 percent in four sessions.
Shares in euro zone banks led the rebound, with Intesa
SanPaolo up 5.5 percent and Commerzbank up
3.8 percent.
The banking sector index had tumbled 21 percent in
three weeks, hammered by the return of fears over the region's
sovereign debt crisis.
"It's just a short-term technical bounce after a brutal
drop. The fact is that everything has been broken on charts:
trendlines, channels, 200-day moving averages," said David
Thebault, head of quantitative sales trading at Global Equities
in Paris.
The recovery in U.S. and European shares boosted the MSCI
global stock index, snapping a six-session
losing streak. It was up 0.55 percent, after Tuesday's 1.5
percent decline.
In Tokyo, the Nikkei fell 0.8 percent to its lowest
level since mid-February, following Tuesday's sell-off on Wall
Street and in Europe.
Benchmark 10-year Treasury notes last traded
down 12/32 in price with a yield of 2.03 percent. The 10-year
note yield on Tuesday fell below the key chart level of 2.00
percent for first time in about four weeks.
German Bund futures were down 66 basis points at
139.67, reversing half of Tuesday's gains.
In the currency market, the euro rose 0.3 percent
versus the dollar to $1.3120 after touching a near one-month low
of $1.3033 on Monday. Against the yen, it was up 0.7
percent at 106.28 yen after earlier touching 105.42, the lowest
level in almost seven weeks.
The dollar also weakened against other major currencies. The
dollar index shed 0.24 percent at 79.704, rebounding from
an earlier low of 79.508.
In oil trading, Brent crude slipped below $120 a
barrel, pressured by rising U.S. inventories as well as concern
about the strength of global demand. Brent futures for May
delivery were last down 23 cents at $119.65 a barrel after
touching a near two-month low of $119.05 earlier. U.S. oil
futures were up $1.15 at $102.19.
Spot gold fell for first time in five sessions. It
was last down 0.11 percent at $1,658.50 an ounce.
