* Crude falls, Goldman Sachs advises taking profits
* US stocks flat; Alcoa to report after market's close
* Rate expectations send Bund yield above 3.5 percent
* Dollar up vs euro after U.S. government shutdown avoided
(Adds comment, details, updates prices)
By Wanfeng Zhou
NEW YORK, April 11 (Reuters) - Crude oil prices fell
sharply on Monday after surging last week as investors warily
eyed efforts to halt Libya's conflict, while the dollar rose
against the euro after the U.S. government averted a potential
shutdown.
U.S. stocks pared early gains to trade little changed, with
investors nervously awaiting companies' quarterly results to
see if earnings would be strong enough to spark further gains
in equities.
Aluminum maker Alcoa <AA.N> will mark the unofficial start
of the quarterly earnings season when it reports results after
the market's close on Monday. Profits for S&P 500 companies are
seen rising 11.4 percent from a year ago, according to Thomson
Reuters data. See []
"There's a question of whether companies can meet the
fairly optimistic expectations," said John Carey, portfolio
manager at Pioneer Investment Management in Boston, which has
about $260 billion in assets under management. "There's
potential for disappointment, but if they come in line or
above, the market could experience a continued rally."
The Dow Jones industrial average <> was up 5.11 points,
or 0.04 percent, at 12,383.72. The Standard & Poor's 500 Index
<.SPX> was down 2.77 points, or 0.21 percent, at 1,325.45. The
Nasdaq Composite Index <> was off 10.54 points, or 0.38
percent, at 2769.70.
ICE Brent crude for May <LCOc1> was last down $2.06 at
$124.59 a barrel. U.S. crude for May delivery <CLc1> fell $2.39
cents to $110.39 a barrel. U.S. crude fell further after
long-term commodity bull Goldman Sachs <GS.N> recommended
clients take profits after recent 30-month highs.
The African Union said Muammar Gaddafi had accepted a road
map to end the civil war, but forces loyal to him shelled the
town of Misrata. A broker said oil also fell on profit-taking.
For details, see []
Analysts were skeptical about the peace deal. And even if
an end to the civil war is in sight, it will be some time
before Libyan exports return to pre-conflict levels.
"Some of Libya's oil fields, which have recently come under
attack, have suffered severe damage, which is likely to have a
long-lasting negative impact on the country's production
profile," said Amrita Sen at Barclays Capital. "We don't
believe there is reason to be optimistic even if Gaddafi were
to step down, as the power vacuum would be very large."
World stocks as measured by MSCI <.MIWD00000PUS> were down
0.3 percent, with emerging markets <.MSCIEF> off 0.5 percent.
European stocks fell, with the FTSEurofirst 300 <> index
of top European shares down 0.2 percent.
Although the world economy is fairly robust, investors
increasingly expect higher commodity prices to drive up
inflation, prompting central banks to tighten monetary policy
sooner.
The International Monetary Fund said on Monday it did not
believe that rising commodity prices will derail the global
economic recovery but warned inflation will remain elevated for
a while.
GREENBACK GAINS LIMITED
The dollar rose against the euro after the U.S. Congress on
Friday reached a last-minute budget deal that avoided a
government shutdown, though traders said the focus on the U.S.
debt ceiling debate could limit any gains.
A rebound in the dollar was also overdue after it fell
against the euro for the past four months. For the month of
April, the dollar was still down more than 2 percent.
The euro <EUR=> fell 0.3 percent to $1.4440, after hitting
a 15-month high around $1.4486 last Friday. The high on
electronic trading platform EBS was $1.4485.
"We're having some sort of relief rally after the U.S.
government did not shut down as feared," said David Watt,
senior currency strategist at RBC Capital Markets in Toronto.
The yen was off an 11-month low against the euro and a
2-1/2-year trough versus the Australian dollar as another
earthquake in Japan led some investors to close riskier bets
funded by cheap borrowing in the Japanese currency.
[]
The strong aftershock in Japan unnerved some investors,
driving down copper prices after they earlier reached five-week
highs on a weaker dollar and robust imports by top consumer
China.
The euro touched its highest against the yen since May 2010
of 123.33 yen <EURJPY=R> on trading platform EBS. It later gave
up gains and was last down 0.5 percent at 122.07 yen.
Expectations of another rise in European Central Bank
interest rates by July kept the euro close to recent highs and
pushed euro zone government bond prices lower. German Bund
yields <DE10YT=TWEB> briefly rose above 3.5 percent for the
first time since August 2009.
(Additional reporting by Ryan Vlastelica and Gertrude
Chavez-Dreyfuss in New York; Jeremy Gaunt, Saikat Chatterjee,
Blaise Robinson and Anirban Nag in London; Editing by Kenneth
Barry)
