* World stocks hold near 29-month highs on data, earnings
* Egypt, euro zone worries ease but flare-ups eyed
* Oil prices settle back after earlier surge
(Updates with U.S. midday trading)
By Al Yoon
NEW YORK, Feb 2 (Reuters) - World shares eked out gains on
Wednesday as escalating violence in Egypt and rising oil prices
painted a disturbing backdrop even as the latest data added to
evidence of a sustained global economic recovery.
Brent crude earlier topped more than $102 a barrel on
worries that the flare-ups in Egypt could spread across the
Middle East and North Africa, source of more than a third of
the world's oil.
By midday in New York, however, prices of U.S. crude
futures had fallen in volatile trading on rising crude and
gasoline stocks in the United States and as the dollar
strengthened.
The dollar, a traditional safe-haven currency, rose against
the euro on the unrest in Egypt and on signs of dissension over
a euro zone rescue plan. U.S. light sweet crude oil <CLc1> fell
6 cents to $90.71 per barrel. Brent also declined.
MSCI's all-country world stock index <.MIWD00000PUS>, one
of the broadest gauges of global equities, rose 0.15 percent
after earlier hitting levels last seen in August 2008.
"Just like everyone else, we are monitoring Egypt very,
very closely in the event we need to make adjustments," said
Dan Fuss, vice chairman of Loomis Sayles, which has more than
$150 billion in assets under management.
Emerging market shares <.MSCIEF> led gains, rising 0.5
percent. They are down more than 1 percent in 2011, however,
reflecting a shift by investors to developed markets such as
the United States, where key indexes on Tuesday hit their
highest closing levels in about 2-1/2 years.
Equities were bolstered by a report by ADP Employer
Services on Wednesday that U.S. private employers added 187,000
jobs in January, more than forecast. On Tuesday, strong factory
data worldwide prodded U.S. benchmark stock indexes higher.
But the civil unrest in Egypt remained a top concern as
violent clashes erupted between opponents and supporters of
President Hosni Mubarak in central Cairo. Worries that the
protests could spread to other countries in the region have
pressured equities on and off in recent days. [].
U.S. indexes traded little changed, with the Dow Jones
industrial average <> dipping 0.46 points to 12,039.70. The
Standard & Poor's 500 Index <.SPX> declined 3.03 points, or
0.23 percent, to 1,304.56 and the Nasdaq Composite Index
<> rose 1.25 points, or 0.05 percent, to 2,752.44.
Appliance maker Whirlpool Corp <WHR.N> fell 3.1 percent to
$82.77 after its profit missed expectations. [].
Time Warner Inc <TWX.N> rose 2.25 percent to $34.56 after
its profit topped estimates on a 21 percent jump in advertising
sales at its cable networks. []. Mattel Inc
<MAT.O> rose 2 percent to $24.62 after its profit beat
expectations on strong demand for its Barbie and American Girl
dolls. [].
"The world economy appears to be improving a little faster
than expected, valuations are OK and companies are publishing
quite good results," Geert Ruysschaert, strategist at BNP
Paribas Fortis Private Banking, said. "Investors can take
advantage of that."
Commodity prices continued to rise on improving global
growth prospects with copper <CMCU3> hitting a record high at
$9,988.25 a tonne before settling back at $9,921.00.
The pan-European FTSEurofirst 300 <> rose 0.2
percent, off its highs but at a 3.5 percent year-to-date gain.
Earlier, Japan's benchmark Nikkei <> ended up 1.8 percent
for its biggest daily gain since Dec. 2.
Despite lingering Middle East tension, bids for some
safe-haven assets, including U.S. Treasury bonds, eased.
Benchmark 10-year Treasury note yields rose 0.04 percentage
point to 3.48 percent as their prices fell.
Gold <XAU=> fell $10.72, or 0.8 percent, to $1,329.50 an
ounce, well below its December record high near $1,430.
Peter Hillyard, an analyst at ANZ Bank in London, said
gold was lacking direction after its retreat from December's
record high above $1,430 an ounce.
"The sell-off seemed to illustrate that people had lost
faith in gold and could see much better places to invest," he
said. "I don't think people want to sell it," he added. "They
are fearful about what is going to happen in the Middle East,
and what really is going on in the markets."
In currencies, the euro retreated from a 2-1/2-month high
against the dollar as signs of dissension over a euro zone
rescue plan caused some investors to take profits after a
recent rise.
The euro climbed as high as $1.3861 overnight, its best
level since early November, but fell after a German government
official said Berlin opposed allowing a euro zone rescue fund
to buy troubled countries' debt.
Traders said winter storms in United States kept trading
ranks thin.
A downgrade of Irish government debt also prompted some
euro selling, but analysts said the currency remains in an
uptrend and may yet test $1.40 in the weeks ahead.
"There's a bit of a flare-up in Egypt, and some of our
barometers suggest a hint of renewed risk aversion, but I don't
think it will dissuade investment in high-yield assets," said
BNY Mellon strategist Michael Woolfolk. "And given how far the
euro has come, you would expect to see some profit-taking."
Dollar gains against major currencies were slight, even
after the U.S. private employment data. The U.S. Dollar Index
<.DXY> rose 0.21 percent to 77.226.
The euro <EUR=> fell 0.33 percent to $1.3787. Against the
Japanese yen, the dollar <JPY=> rose 0.49 percent to 81.71
yen.
(Additional reporting by Simon Jessop and Neal Armstrong in
London, and Steven C. Johnson and Ryan Vlastelica in New York;
Editing by Leslie Adler)
