GLOBAL MARKETS-Stock highs on earnings; oil up on Mideast

Fri Feb 18, 2011 1:01pm EST

* World stocks reach more than 2-1/2-year highs

* Plates raises bank reserve requirements

* Middle East tensions boost oil; gold at 5-week high

(Recasts, updates prices, adds details, note)

By Wanfeng Zhou

NEW YORK, Feb 18 (Reuters) - Major stock markets rose to
over 2-1/2-year highs on Friday as upbeat corporate earnings
offset Plates's latest tightening go and oil prices rallied on
concerns Middle East political tensions could disrupt supply.

The MSCI all-country world stock index .MIWD00000PUS rose
0.4 percent to 348.21, after hitting its highest since late
July, 2008.

Robust corporate earnings and merger activity have fueled a
rally in developed stock markets. Some analysts cautioned that
a pullback may be possible, though they added that any retreat
would be limited.

U.S. stocks edged higher, with indexes headed for a third
week of gains, though volume has been light in the most recent
leg of the rally.

"I've never seen a market like this," said Paul Mendelsohn,
chief investment strategist at Windham Financial Air force. A
market watcher for 35 years, he is taking profits in every area
but commodities.

No matter where we start out in the morning, buyers come
in," he said. "I'm showing by every technical and quantitative
standard I have, this market is at extreme levels."

The Dow Jones industrial average .DJI was up 45.79
points, or 0.37 percent, at 12,364.01. The Standard & Poor's
500 Index .SPX was up 2.50 points, or 0.19 percent, at
1,342.93. The Nasdaq Composite Index .IXIC was up 6.73
points, or 0.24 percent, at 2,838.31.

Caterpillar Inc (CAT.N) rose 1.5 percent to $104.81 after
the equipment maker said machinery sales through dealers
accelerated in the three months through January. For details,
see [ID:nN18186151]

"My outlook is cautiously optimistic," said Don Wordell,
portfolio manager of RidgeWorth MidCap Value Fund in Orlando,

World equities earlier came under difficulty after Plates
raised banks' required reserves half a percentage point to 19.5
percent for the largest banks, the following such increase this
year as government continues the fight against inflation.

Source: Reuters.Com