* Global stocks edge higher as U.S. stocks waver
* Oil drops after OPEC says demand contracting fast
* Chinese comments on credit-worthiness weigh on bonds
(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, March 13 (Reuters) - Global stocks edged higher
in choppy trade on Friday for a fourth straight day, taking
away a safety bid for the dollar and U.S. government debt, but
investor sentiment on Wall Street remained far from buoyant.
Stocks around the world as measured by MSCI's all-country
stock index <.MIWD00000PUS> were on track to post one of their
best weeks in 20 years, up about 8 percent for the week.
The banking sector pushed European stocks higher after
comments from Citigroup <C.N> and Bank of America <BAC.N> they
would not need more U.S. government money.
Oil fell to almost $46 a barrel as the stock market dropped
and traders awaited potential further production cutbacks from
a meeting of the Organization of Petroleum Exporting Countries
this weekend in Vienna.
U.S. stocks traded near break-even. A decline would snap
their best three-day romp since late November. Hopes of
recovery in the ailing banking system had propelled stocks
higher, but lingering doubts dampened the rally.
Banking shares weighed on U.S. equity markets. The S&P
financial index <.GSPF> shed 1.2 percent, while the KBW Bank
index <.BKX> fell 3 percent.
"There's no tangible news (on banks), just profit taking
off of huge moves this week," said Bobby Harrington, head of
block trading for UBS in Stamford, Connecticut.
Before 2 p.m., the Dow Jones industrial average <> was
up 2.47 points, or 0.03 percent, at 7,172.53. The Standard &
Poor's 500 Index <.SPX> was down 0.41 points, or 0.05 percent,
at 750.33. The Nasdaq Composite Index <> was down 5.75
points, or 0.40 percent, at 1,420.35.
Citigroup <C.N> gained 6 percent after Chairman Richard
Parsons told Reuters late on Thursday the bank did not need
more government aid. But long-standing worries about how to
clean up banks' toxic assets resurfaced, taking the steam out
of a morning rally on Wall Street.
European shares rose for a fourth straight day. The
FTSEurofirst 300 <> index of top European companies
closed 0.8 percent higher at 702.12 points, its first close
above 700 since the end of February.
The dollar rose against the euro in choppy trade as market
sentiment turned negative with the fall in U.S. stocks,
prompting a safe-haven retreat to the U.S. currency.
Better-than-expected U.S. economic data and signs that the
U.S. banking sector may be stabilizing helped U.S. stocks gain
early in the session.
"The dollar rally here versus the euro is all about stocks.
Sentiment has turned in fits and starts," said Brian Dolan,
chief currency strategist at Forex.com in Bedminster, New
Jersey.
"All that is happening right now is a reality check and
investors are asking whether this is really the bottom here.
But conviction is really low and that's why we're seeing
perpetual setbacks like this," he added.
The dollar rose against a basket of majorcurrencies, with
the U.S. Dollar Index <.DXY> up 0.02 percent at 87.491. Against
the yen, the dollar <JPY=> was up 0.28 percent at 98.03.
The euro <EUR=> fell 0.17 percent to $1.2887.
U.S. Treasury debt prices turned higher after the week's
mammoth rally in stocks ran out of steam.
Euro zone government bonds fell, pushing futures to a
one-month low, as rising European stock prices helped to whet
risk appetite and prompt investors to dump less-risky fixed
income assets in volatile trade. []
U.S. Treasuries also wavered. Stark remarks on U.S.
credit-worthiness from Chinese Premier Wen Jiabao, who
expressed anxiety over the "security of our assets," rattled
markets and weighed on debt.
"I really don't think you're going to see a true floor in
this market until we get a comprehensive plan on the finance
sector," said Peter Jankovskis, director of research at
OakBrook Investments LLC in Lisle, Illinois.
The benchmark 10-year U.S. Treasury note<US10YT=RR> fell
5/32 to yield 2.88 percent. The 2-year U.S. Treasury note
<US2YT=RR> gained 2/32 in price to yield 0.98 percent.
U.S. crude futures slipped in choppy trading on weak demand
forecasts from the Organization of Petroleum Exporting
Countries and the International Energy Agency. But the market
was cautious ahead of a possible output cut when OPEC meets
Sunday.
Some analysts said the energy markets appeared tracking
Wall Street, which fell back after early gains on growing
confidence of a stabilization in the banking sector.
U.S. light sweet crude oil <CLc1> fell 1.98 percent to
$46.10 a barrel.
Spot gold prices <XAU=> rose 0.12 percent to $927.75 an
ounce.
Overnight in Asia stocks rose, with Japan's Nikkei <>
gaining 5.1 percent, its biggest weekly gain of the year. The
MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS>
rose 3.2 percent.
(Reporting by Ellis Mnyandu, Gertrude Chavez-Dreyfuss, Pedro
Nicolaci da Costa and Burton Frierson in New York; Doug Palmer
in Washington; Joanne Frearson, Paul Lauener and Jan Harvey in
London; and Marcin Grajewski in Brussels; writing by Herbert
Lash, Editing by Chizu Nomiyama)
