* US stocks rebound, world stocks hit 30-month highs
* Oil prices advance amid Israel-Iran tensions
* Middle East unrest boosts safe-haven franc, Treasuries
(Updates prices, adds details)
By Wanfeng Zhou
NEW YORK, Feb 17 (Reuters) - The safe-haven Swiss franc and
U.S. government bonds rallied on Thursday, while crude oil
prices rose as unrest in the Middle East and tensions between
Israel and Iran escalated.
U.S. stocks, however, shrugged off concerns about the
Middle East as investors bought on early dips. World equities
measured by the MSCI All-Country World Index <.MIWD00000PUS>,
hit more than 2-1/2 year highs.
Bahrain police stormed a square in Manama, killing at least
three people as protests in the Middle East and North Africa
gathered pace. Clashes were also reported in Libya, while at
least 40 were wounded in Yemen in demonstrations against the
president's 32-year rule.
Iranian state TV said on Thursday two Iranian warships are
due to pass through the strategic Suez Canal in a move that
Israel has called a "provocation."
"All in all, the pace of change sweeping the region is
truly mind-boggling," said Edward Meir, senior commodity
analyst at brokers MF Global.
The U.S. dollar fell 1 percent to 0.9496 Swiss franc
<CHF=EBS>, while the euro dropped 0.7 percent to 1.2921 franc
<EURCHF=EBS>.
"If events in the Middle East do escalate we will see safe
haven flows which will help the Swiss franc," said Kenneth
Broux, market economist at Lloyds.
Benchmark ten-year U.S. Treasury notes <US10YT=RR> last
traded up 18/32 in price to yield 3.58 percent, down from 3.62
percent late on Wednesday.
Unrest spreading across the oil-rich Middle East and North
Africa stoked fears of a disruption of oil flows.
U.S. crude futures <CLc1> ended higher for a second
straight day, after trading as high as $86.50. Brent crude for
April delivery <LCOc1> earlier climbed above $104 a barrel,
before retreating.
Gold, also a safe-haven, rose for a fourth day, its longest
winning streak since September. Spot gold <XAU=> hit a
five-week high at $1,384.65 an ounce.
STOCKS STILL IN DEMAND
The Dow Jones industrial average <> ended up 29.97
points, or 0.24 percent, at 12,318.14. The Standard & Poor's
500 Index <.SPX> was up 4.11 points, or 0.31 percent, at
1,340.43. The Nasdaq Composite Index <> was up 6.02
points, or 0.21 percent, at 2,831.58.
Wall Street stocks earlier came under pressure after the
United States reported the fastest rise in core consumer prices
in more than a year in January. But bargain hunters quickly
rushed in and pushed the index back near multi-year highs.
The core Consumer Price Index, which excludes volatile food
and energy costs, increased 0.2 percent last month after a 0.1
percent rise in December, the Labor Department said. It was the
largest increase since October 2009.
"We've run up incredibly over the last six months, and many
many onlookers are looking for a pullback, and it just refuses
to come," said Andrew Wilkinson, senior market analyst at
Interactive Brokers Group in Greenwich, Connecticut.
European shares <> closed at a new 29-month high for
the fourth straight day. The MSCI All-Country World Index
<.MIWD00000PUS> hit its highest level since the end of July
2008 and last traded up 0.61 percent at 347.03.
The euro edged higher versus the dollar as solid demand at
a Spanish debt auction offset broader euro zone banking and
sovereign debt concerns. It last traded up 0.3 percent at
$1.3606 <EUR=EBS>.
(Additional reporting by Edward Krudy, Karen Brettell and
Caroline Valetkevitch in New York, Lucia Mutikani in Washington
and Dominic Lau in London; Editing by Andrew Hay)
