* Global equity markets continue to climb
* Yen gains on minister's comments, rise seen temporary
* Gold gains after longest losing streak in four years
* Oil rebounds, rises above $105 a barrel
(Adds oil settlement prices, updates prices)
By Herbert Lash
NEW YORK, May 20 (Reuters) - Global equity markets mostly
rose on Monday, driven higher by a flurry of merger and
acquisition activity, while a recent tumble in the yen against
the dollar halted after Japan's economy minister suggested the
currency might have weakened enough.
Major American and European stock indices are up double
digits - the U.S. benchmark S&P 500 index is almost 17 percent
higher so far this year - and investors still see better returns
ahead in equities, even as Wall Street closed slightly lower.
Deals such as Yahoo (NasdaqGS: YHOO - news) 's $1.1 billion bid for blogging
service Tumblr indicate companies still are seeking to grow
through acquisitions despite record high share prices, a bullish
sign for stocks. Yahoo rose 0.23 percent to $26.58.
In another deal, generic drugmaker Actavis Inc (NYSE: ACT - news) .,
itself the subject of takeover speculation, said it would buy
specialty pharmaceutical company Warner Chilcott Plc (NasdaqGS: WCRX - news)
for $5 billion in stock.
Actavis rose 1.32 percent to $127.15, while Warner Chilcott
gained 2.03 percent to $19.60.
U.S. stocks fell after modest gains earlier in the session
on a day with no economic data and little news or a catalyst to
drive prices much in either direction, said Tim Ghriskey, chief
investment officer at Solaris Group in Bedford Hills, New York.
"There are people scared by the sharpness and the length of
this rally, which is totally understandable, but there are still
those who are afraid to not invest and miss the rally," he said.
The Dow Jones industrial average closed down 19.12
points, or 0.12 percent, at 15,335.28. The Standard & Poor's 500
Index fell 1.18 points, or 0.07 percent, to 1,666.29. The
Nasdaq Composite Index shed 2.53 points, or 0.07
percent, at 3,496.43.
Major indices elsewhere mostly rose. MSCI (NYSE: MSCI - news) 's all-country
world equity index rose 0.43 percent to its
highest since June 2008. MSCI's emerging markets index rose 0.25
percent, but Mexico's IPC (SES: E1:I12.SI - news) index fell 1.74 percent, beaten
lower by the weak outlook for the country's leading shares.
European shares hit five-year highs, boosted by strength in
German stocks and a travel sector lifted by a surge in Ryanair
after it reported better-than-expected earnings for the
past year. Ryanair rose 6.87 percent to a record 6.765 euro.
Britain's benchmark FTSE 100 (FTSE: ^FTSE - news) index rose to its best
closing level since late 2000, while the FTSEurofirst-300 index
of leading European shares rose 0.31 percent to close
at 1,252.09.
The Japanese economy minister, Akira Amari, said the yen's
excessive strength had largely corrected and further weakness
could damage Japan's economy.
Analysts, however, said any sharp dip in the dollar against
the yen was a buying opportunity as Tokyo was committed to
easier monetary policy. While the dollar fell sharply on Amari's
comments and remained down on the day, it was off the session
low.
The dollar was last 0.64 percent lower at 102.26 yen,
having hit a low of 102.19. Last Friday, the dollar reached a
high of 103.30 yen.
The euro gained 0.59 percent against the dollar to
128.886.
Gold gained about 2 percent after a roller coaster session
in which it lurched $35 an ounce higher to snap seven
consecutive days of losses, with traders citing a wave of
pent-up short-covering.
Short sellers buy a borrowed security and immediately sell
it in the hope of buying it back at a lower price to pay the
lender. When prices are not near the agreed "strike" price,
short-sellers are forced to buy, pushing prices higher.
Gold is down 17 percent for the year. Hedge funds and other
major commodity speculators pulled $1.4 billion from the U.S.
gold futures market in the week to May 14, Reuters calculations
of data from the Commodity Futures Trading Commission show.
Spot gold prices rebounded $35.96 on Monday, to
$1,394.60 an ounce after slipping to $1,338.95 its weakest since
April 16.
The beginning of the end of the Fed's massive bond-buying
program might come sooner than many investors think if recent
gains in the U.S. labor market do not prove fleeting.
U.S. government debt prices slipped after an early rebound
from last week's sell-off as the dollar weakened against the
yen. The benchmark 10-year U.S. Treasury note was
down 3/32 in price to yield 1.9629 percent.
Brent crude traded near break-even, weighed by ample
supplies, weaker demand for fuel and a strong dollar.
Brent crude for July was up 16 cents to settle at
$104.80 a barrel. U.S. crude rose 69 cents to settle at
$96.71.
(Reporting by Herbert Lash; Editing by Dan Grebler)
