GLOBAL MARKETS-Shares gain in broad global advance, U.S. debt prices fall

* Dow hits record high, S&P nears new record

* Crude oil up on rising Ukraine tensions

* Euro under pressure after ECB comments

* U.S. debt prices fall before heavy week of data

(Adds close of European bond, stock markets)

By Herbert Lash

NEW YORK (Frankfurt: HX6.F - news) , May 12 (Reuters) - Global equity markets surged on

Monday, with the Dow industrials setting a record high as stocks

advanced in a broad rally spurred by strong corporate results

and an improving economic outlook.

Prices of U.S. Treasury debt fell, while European shares

scaled six-year highs, underpinned by fresh takeover activity

and renewed speculation about monetary stimulus from the

European Central Bank.

On Wall Street, nine of the 10 primary S&P 500 sectors were

in positive territory, with gaining stocks topping declines by

about 4 to 1 on both the New York Stock Exchange and the Nasdaq

stock market.

MSCI (NYSE: MSCI - news) 's all-country world index gained 0.6

percent and the pan-European FTSEurofirst 300's index

of leading shares rose 0.67 percent to close at 1,364.48.

The Dow set an intra-day high and the S&P 500 was less than

four-tenths of 1 percent away from a new record high.

The Dow Jones industrial average was up 95.82 points,

or 0.58 percent, at 16,679.16. The Standard & Poor's 500 Index

was up 14.54 points, or 0.77 percent, at 1,893.02. The

Nasdaq Composite Index was up 57.88 points, or 1.42

percent, at 4,129.75.

Weak economic data during the harsh winter and surprising

strength in the bond market had kept money in fixed income, said

David Kelly, chief global strategist for JPMorgan Funds in New

York. But an improving economic outlook has drawn investors back

into stocks, he said.

"I hate to make day-to-day rationalizations of the behavior

of the market, but the key point is, falling unemployment and

rising economic growth ultimately mean that both interest rates

and stocks prices are likely to move higher," Kelly said.

Estimate-beating results from Italian lenders UniCredit (Berlin: CRIH.BE - news)

and Banca Popolare di Milano (Milan: PMI.MI - news) reinforced

optimism about a recovery in Italy, whose shares have

outperformed Germany and France over the past year.

Equity markets shrugged off results of a weekend referendum

in Ukraine, where pro-Moscow rebel organizers said nearly 90

percent had voted in favor of self-rule, possibly adding more

fuel to a conflict spinning increasingly out of control.

U.S. Treasuries yields rose before a heavy week of data that

includes retail sales and consumer price reports that will be

watched for signs of economic strength and whether inflation is

rising from levels below the Federal Reserve's targets.

Benchmark 10-year notes were last down 9/32 in

price to push their yield up to 2.6539 percent.

The euro traded near break-even against the dollar and yen,

ignoring the weekend referendum in Ukraine.

Against sterling, however, the euro fell to a 16-month low

on growing bets the European Central Bank will ease monetary

policy just as the Bank of England prepares to raise rates.

The euro's gains were trimmed after dovish comments from

Austria's central banker, Ewald Nowotny. He told reporters it

would take more than a cut in interest rates to combat low

inflation in the euro zone.

The euro was flat against the greenback at $1.3757.

The dollar rose 0.25 percent against the yen at 102.10.

Global oil prices rose as investors braced for a possible

escalation in Ukraine's civil conflict and the European Union

expanded sanctions to Russian individuals and Crimean companies.

Although it is unlikely the turmoil would lead to a

disruption in energy supplies from Russia, top global oil

exporter Saudi Arabia volunteered to supply more crude in the

event of a shortage.

Brent crude was up 47 cents at $108.36 a barrel.

U.S. crude gained 54 cents to $100.53 a barrel.

(Reporting by Herbert Lash; Additional reporting by Marc Jones

in London; Editing by Dan Grebler)