(Recasts with U.S. markets, adds byline; changes dateline; previous LONDON)
By Herbert Lash
NEW YORK, Aug 11 (Reuters) - Global stocks rose on Monday, as a rising dollar dampened inflation worries and helped push oil and other commodities sharply lower.
Stocks climbed as oil fell, building on a Wall Street rally last week that gave U.S. equity markets their best week in months. The stock gains lessened the safe-haven allure of government debt.
Crude <CLc1> fell more than $2 at one point to below $113 a barrel, trading near its lowest levels since early May, and the dollar edged higher versus the euro as worries about economies outside the United States mounted.
European shares rose to six-week highs as the slumping euro boosted exporters such as automotive stocks,
Fighting between Russia and Georgia provided early support to crude prices, which helped European stocks in the energy sector. But the decline in oil prices pushed U.S. shares in the energy sector lower.
Heightened geopolitical tensions from a further push by Russian troops into Georgia helped buoy gold prices in early trading. A rising dollar and declining oil erased those gains.
U.S. and euro zone government bond prices fell from last week's highs in reaction to the rally in equity markets. The Georgia-Russia conflict provided underlying support for safe-haven government debt.
"Stocks turned higher because lower oil prices are being viewed as a stimulus to the economy," said Andrew Brenner, senior vice president at MF Global in New York. "The idea is that lower oil prices will stimulate the U.S. economy and as it does so, stocks will do better and bonds will do worse."
Before 1 p.m., the Dow Jones industrial average <
> wasup 76.45 points, or 0.65 percent, at 11,810.77. The Standard & Poor's 500 Index <.SPX> was up 12.30 points, or 0.95 percent, at 1,308.62. The Nasdaq Composite Index < > was up 33.81 points, or 1.40 percent, at 2,447.91.Shares of Amazon jumped 10.2 percent to $88.69 on Nasdaq after Citigroup said the company's Kindle book reader could be one of the top electronics gifts of the 2008 holiday season, along with Apple Inc's <AAPL.O> newest iPhone.
Apple's stock also gave a major lift to both the Nasdaq and the S&P 500, with Apple up 2.6 percent at $173.94.
Fighting between Russia and Georgia disrupted some Caspian shipments, which lifted BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total <TOTF.PA> by 1.1 percent to 1.9 percent.
Investors are worried that the fighting might disrupt the key Baku-Tbilisi-Ceyhan oil pipeline that carries Azeri crude through Georgia to Ceyhan on the Turkish Mediterranean coast.
Some analysts said softer oil prices might lend a temporary pillar of support for equities, given the slowing in economic growth in Europe and uncertainty over the impact of the credit crunch on the financial sector.
"The backdrop is still very negative and the outlook for the oil price is positive," said Andrea Williams, head of European equities at Royal London Asset Management.
Investors were also relieved that the earnings season now nearing an end was not as damaging as it might have been given the immensity of credit woes in the finance sector.
"Generally, if you look at where (earnings) numbers have come out, we haven't had the massive downgrades that people thought, particularly on the financial side. We've still got ING and UBS to go but certainly, the worst is through for writedowns, so it is is more an issue of credit market deterioration," she said.
To be sure, the financial sector was one of the biggest gainers in the United States.
The FTSEurofirst 300 index <
> of top European shares rose 1.08 percent to close at 1,211.95 points, its highest close since June 25.The euro, which last week suffered its biggest weekly fall since its inception in 1999, fell almost to $1.49 <EUR=> at one point. It recouped some losses after European Central Bank council member Klaus Liebscher warned that policy-makers remained focused on taming high inflation. That suggests higher rates in the euro zone may be in store.
"Growth outside the U.S. is really slowing and hawkish remarks by the ECB at this point won't have the same impact on the euro as they did one or two months ago," said Matthew Strauss, a currency strategist at RBC Capital Markets in Toronto.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell 23/32 to yield 4.03 percent. The 30-year U.S. Treasury bond<US30YT=RR> fell 46/32 to yield 4.63 percent.
The euro <EUR=> fell 0.47 percent at $1.4934.
The dollar fell against major currencies, with the U.S. Dollar Index <.DXY> down 0.06 percent at 76.117. Against the yen, the dollar <JPY=> was down 0.02 percent at 110.15. Dollar data:
Worries about slowing global demand and a stronger dollar knocked down oil prices.
U.S. light sweet crude oil <CLc1> fell $2.10 to $113.10 per barrel.
Spot gold prices <XAU=> fell $30.75 to $824.60.
Gold futures turned lower as a rising dollar and declining oil prices erased bullion's early gains because of heightened tensions between Russia and Georgia.
Copper prices slid to six-month lows as a strengthening dollar triggered a sell-off by investors already skittish about weak demand from top consumers China and the United States.
Copper for delivery in three months <MCU3> slid to $7,329.50 a tonne on the London Metal Exchange, and has tumbled about 17 percent since a record high of $8,940 on July 2.
Asian stocks rose, spurred by a growing view that the dollar's long decline is nearing an end.
Japan's Nikkei share average <
> rose 2 percent, led by high-profile exporters Honda Motor Co <7267.T> and Canon Inc <7751.T>.Outside Japan, Asia-Pacific stocks were up 0.6 percent <.MIAPJ0000PUS> as measured by an MSCI index. (Reporting by Walter Brandimarte, Ellis Mnyandu, Ellen Freilich, Vivianne Rodrigues and Frank Tang in New York, and Alastair Sharp and Amanda Cooper in London) (Writing by Herbert Lash. Editing by Richard Satran)