* Stocks open higher as lower oil eases inflation fears
* Oil price retreats from last week's record high
* Yahoo jumps on Icahn letter about Microsoft's interest
* Traders keep eye on developments at G8 meeting in Japan
(Updates market action, quote)
By Richard Leong
NEW YORK, July 7 (Reuters) - U.S. stocks rose on Monday, as
weaker oil prices eased inflation fears and Yahoo shares jumped
after Microsoft said it would be willing to reopen talks to buy
all or part of the Internet company.
U.S. crude oil <CLc1> was last down more than $4 at $140.97
a barrel as the dollar posted a 1-1/2-week high against other
major currencies on speculation of a positive outcome for the
greenback from a meeting in Japan of the Group of Eight
industrialized nations. Oil hit a record of $145.85 last week.
"The dollar hanging here is what's helping oil," said Peter
Boockvar, equity strategist at Miller Tabak & Co in New York.
"In the context of a (stock) market that is oversold, it's not
going to take much for the market to bounce back."
The Dow Jones industrial average <> was up 85.82
points, or 0.76 percent, at 11,374.36. The Standard & Poor's
500 Index <.SPX> was up 8.60 points, or 0.68 percent, at
1,271.50. The Nasdaq Composite Index <> was up 23.55
points, or 1.05 percent, at 2,268.93.
Traders returning from the July 4 long holiday weekend are
watching the G8 meeting in the hopes it will address the effect
of soaring energy costs and the slumping dollar on the global
economy.
Appetite for stocks was also bolstered by bargain-hunting
which began overseas after recent heavy losses. Top European
shares <> were 1.4 percent higher, while Asian equities
advanced, with the Japan Nikkei <> up nearly 1 percent.
MICROSOFT STILL INTERESTED
Company deal news played a decisive role in pushing stocks
higher given a dearth of major earnings and economic releases.
Yahoo <YHOO.O> shares surged more than 8 percent, helping
to lift the rest of the Nasdaq complex after Microsoft <MSFT.O>
said it would be willing to reopen talks to buy all or part of
the company.
Billionaire investor Carl Icahn, a major Yahoo shareholder,
is running a slate of candidates to replace its board. He said
in an open letter released on Monday that he had spoken often
with Microsoft CEO Steve Ballmer over the last week.
Microsoft, which broke off talks in early May to buy Yahoo
for $47.5 billion, said it would enter into talks immediately
if a new board were elected at Yahoo's Aug. 1 stockholder
meeting. For more see [].
Another huge gainer was APP Pharmaceuticals <APPX.O>, whose
shares surged nearly 32 percent after Germany's Fresenius
<FREG_p.DE> said it plans to acquire it for $3.7 billion.
General Electric's <GE.N> NBC Universal unit and two
private firms said on Sunday they agreed to buy The Weather
Channel from Landmark Communications for an undisclosed sum
[]. GE stock was up 2 percent at $27.44 on the New
York Stock Exchange.
Among the market's losers, Teva Pharmaceutical Industries
Ltd <TEVA.O> <TEVA.TA> fell 7.2 percent on Nasdaq after data
from a late-stage trial showed an increased dose of its
multiple sclerosis drug was not more efficient than an approved
lower-dose version. []
Marshall & Ilsley Corp <MI.N> declined 6.6 percent after
several brokerage downgrades in the wake of the Midwest bank's
forecast of a big second-quarter loss last week.
[]
The market remains worried about the flagging U.S. economy
and whether the Federal Reserve will follow the European
Central Bank's move last week to raise benchmark interest rates
to fight inflation, analysts said.
San Francisco Fed President Janet Yellen will speak about
the economy at 11 a.m. (1500 GMT). Yellen is not a voter this
year on the monetary policy-setting Federal Open Market
Committee. []
(Editing by James Dalgleish)
