* World stocks up 0.6 pct, set for 3rd monthly rise
* U.S. stocks open higher after comments by Fed's Bullard
* Brent crude oil near flat
(Updates prices, quotes, adds context, copper movement)
By Caroline Valetkevitch
NEW YORK, Feb 28 (Reuters) - Major stock markets rose on
Monday as worries eased about the effect of high energy prices
on U.S. economic growth, while the dollar hit a 3-1/2-month low
against a basket of major currencies.
World equities measured by MSCI All-Country World Index
<.MIWD00000PUS> added 0.9 percent, after rising 1.1 percent on
Friday. The global index is up 2.3 percent this month, on track
for a third straight monthly rise.
Comments by James Bullard, president of the St. Louis
Federal Reserve, that the U.S. economy should do well in 2011
and that oil prices are not currently a drag on the recovery
helped boost U.S. stocks.
"If oil prices rise further it will restrain economic
growth, but with no further escalations, at current levels it
isn't going to cause a recession," said Jason Pride, director
of investment strategy at Glenmede Investment and Wealth
Management in Philadelphia.
The dollar, however, came under pressure on expectations
that Fed Chairman Ben Bernanke, in testimony to Congress later
this week, will stick with his recent economic assessment that
the recovery is strengthening, but not enough to bring about a
significant improvement in the jobs market.
The Dow Jones industrial average <> was up 98.95
points, or 0.82 percent, at 12,229.40. The Standard & Poor's
500 Index <.SPX> was up 9.03 points, or 0.68 percent, at
1,328.91. The Nasdaq Composite Index <> was up 14.05
points, or 0.51 percent, at 2,795.10.
U.S. stocks last week had their worst performance since
November on worries about energy prices and the revolt in
Libya.
Brent crude oil prices were volatile, following a spike
last week on worries over supply disruption from the Middle
East and North Africa. Brent crude <LCOc1> was last up 0.2
percent at $112.41.
The uprising in Libya has cut as much as three quarters of
the country's oil output, prompting Saudi Arabia to step in and
plug the supply gap to Libya's oil buyers.
Brent crude is up more than 10 percent this month, heading
toward its sixth straight month of rises. It touched a 29-month
high of near $120 a barrel last week.
The U.S. dollar fell versus a currency basket as investors
speculated that Fed chief Bernanke will this week signal
continued support for the central bank's quantitative easing
program.
Bernanke's testifies to Congress on Tuesday and Wednesday,
and expectations are that he will reiterate his view of an
economic recovery that is still not strong enough to
significantly reduce the jobless rate, suggesting the time is
not ripe for U.S. interest rates to rise.
The ICE futures exchange's U.S. dollar index <.DXY>, which
tracks the greenback's performance against a basket of major
currencies, was down 0.6 percent. It earlier hit its lowest
level since Nov. 9.
U.S. Treasuries prices remained steady at slightly higher
levels after an index of Midwest business activity came in
stronger than expected in February.
Benchmark 10-year note <US10YT=RR> yields stood at 3.42
percent, unchanged from late last week.
U.S. Treasuries earlier were supported by comments by the
president of the New York Fed, William Dudley, that the U.S.
central bank was "very far" from achieving its dual mandate of
maximum sustainable employment and price stability and should
be wary of withdrawing monetary policy support.
According to fund tracker EPFR Global, a growing aversion
to risky assets in the latest week fueled the biggest flows to
global bond funds in more three months, and turned more
investors away from emerging market stocks. []
The rotation out of emerging markets into developed
markets, partly driven by inflation concerns in emerging
economies, has led to outperformance in developed markets. The
MSCI emerging market index <.MSCIEF> has lost 4.2 percent this
year.
Credit Suisse's private bank expected the fund rotation to
ease in the second quarter.
In Europe, the pan-European FTSEurofirst 300 <> index
of top shares was last up 1.1 percent at 1,172, extending gains
after Bullard's comments on the U.S. economy.
Copper prices also rose, helped by a weaker U.S. dollar and
U.S. economic data, including the Midwest business activity
report.
(Additional reporting by Ryan Vlastelica, Ellen Freilich and
Wanfeng Zhou in New York; Dominic Lau, Neal Armstrong, Naomi
Tajitsu, Sue Thomas and Rebekah Curtis in London; Editing by
Leslie Adler)
