GLOBAL MARKETS-Stocks climb, dollar falls on Bernanke comments
* Dollar extends slide, tumbles after dovish Bernanke
* European shares end higher, Wall Street stocks up sharply
* U.S. Treasury prices rise
NEW YORK, July 11 (Reuters) - World stock indexes rose while the dollar weakened on Thursday after Federal Reserve Chairman Ben Bernanke signaled the U.S. central bank may not be as close to slowing stimulus as investors had begun to expect. Copper and gold prices also gained on the view that continuing stimulus from the Fed and from Europe's and Japan's central banks would support global economic growth. Copper prices hit their highest level in nearly a month. Bernanke said late Wednesday the overall message from the central bank was that "a highly accommodative policy is needed for the foreseeable future." Despite minutes from the Fed's June meeting stating that half of its policymakers think the $85 billion-a-month stimulus program should be wound down by the end of the year, Bernanke's message was enough to shift the market's view. "His statement that they will be highly accommodative for the foreseeable future is pretty clear and the market loved it," said Doug Cote, chief market strategist at ING U.S. Investment Management in New York. "That statement was very clear and that is what the market is reacting to because he is in charge." The Fed's stimulus efforts have kept interest rates near zero and helped lift U.S. stocks to record highs this year. Investors worry the U.S. recovery would be hurt if the Fed removes its support too soon. On Wall Street, the S&P 500 rose more than 1 percent, putting it within range of an all-time closing high. The Dow Jones industrial average was up 126.25 points, or 0.83 percent, at 15,417.91. The Standard & Poor's 500 Index was up 16.78 points, or 1.02 percent, at 1,669.40. The Nasdaq Composite Index was up 46.62 points, or 1.32 percent, at 3,567.38. MSCI's world index rose 1.3 percent, while the pan-European FTSEurofirst 300 closed up 0.6 percent. The dollar index, which tracks the greenback against a basket of six currencies, fell to 82.418, its lowest since June 25 and down 2.8 percent from a three-year high of 84.753 touched on Tuesday. It last traded down 1.3 percent at 82.978. "The dramatic drop in the dollar highlights how one-sided (dollar bullish) the market had become and how quickly traders raced to close out long dollar positions," said Camilla Sutton, chief foreign exchange strategist at Scotiabank in Toronto. Large swings in currencies, stocks and bonds over recent weeks have underscored how difficult it will be for the Fed and other central banks to change their stimulus policies without causing a lot of disruption to markets. Portuguese, Spanish and Italian bonds and Lisbon's stock market bucked the wider global move higher as tensions continued to bubble on the euro zone's debt-strained periphery.
BOND PRICES HIGHER U.S. government debt prices rose on Thursday after the Treasury sold 30-year bonds. "The auction was well received," said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. Benchmark 10-year Treasury notes last traded 17/32 higher with a yield of 2.6079 percent. Three-month copper on the London Metal Exchange rose to its highest since June 18 at $7,049.25 a tonne in intraday trade. Spot gold climbed as much as 2.7 percent to $1,298.36, its highest since June 24. It was up 1.7 percent to $1,285.16 an ounce. Oil futures were down sharply, however. Brent crude oil futures fell 82 cents to $107.69, after hitting $108.93, its loftiest since April 3. A monthly IEA oil report damped bullish sentiment. U.S. crude dipped from a 15-month high as investors took profits after three weeks of sharp gains. The price was down $1.70 at $104.82 a barrel after peaking at $107.45 earlier.