* Planned White House meeting buoys sentiment after dashed
* Dollar slips against safe-haven yen, Swiss franc
* Brent oil pares losses, U.S. crude turns higher
* Treasury markets closed for Columbus Day
By Herbert Lash
NEW YORK, Oct 14 (Reuters) - Global equity markets rebounded
and oil pared its losses on Monday on news of a planned meeting
between President Barack Obama and leaders in Congress to
discuss an impasse over how to extend the U.S. debt ceiling and
end a partial government shutdown.
The lack of an expected deal over the weekend to avert a
looming U.S. debt default as early as Oct. 17 weighed on world
equity markets earlier in the day and kept the dollar under
pressure. The yen rose as some investors sought safer assets.
Obama had planned to meet congressional leaders at 3 p.m. to
discuss how to raise the $16.7 trillion federal borrowing limit
and end a partial shutdown of the federal government, which
began Oct. 1.
The meeting was later postponed to allow Senate leaders time
to "continue making important progress" on talks over the debt
and government shutdown, the White House said.
Earlier, Senate Majority Leader Harry Reid emerged from a
half-hour meeting with Senate Republican leader Mitch McConnell
and said he hoped to have a plan to present to Obama to end the
shutdown and to raise the debt limit.
"They are looking for a big agreement sooner rather than
later," said Stephen J. Carl, principal and head equity trader
at The Williams Capital Group in New York.
MSCI's world equity index rose 0.22 percent
after trading lower by about the same earlier, while the FTSE
Eurofirst 300 index of leading European shares closed
0.13 percent higher at 1,252.47 after late-session gains.
The Dow Jones industrial average was up 48.80 points,
or 0.32 percent, at 15,285.91. The Standard & Poor's 500 Index
was up 5.30 points, or 0.31 percent, at 1,708.50. The
Nasdaq Composite Index was up 19.25 points, or 0.51
percent, at 3,811.13.
U.S. government debt markets were closed because of Columbus
Day, a federal holiday.
Investors started the day skeptical of a deal that had been
expected over the weekend, said Brad McMillan, chief investment
officer at Commonwealth Financial in Waltham, Massachusetts.
Even if a deal gets done, McMillan said the stand-off had
created "justifiable anxiety" and tremendous uncertainty.
"We've done more damage both directly to the economy,
through the shutdown, and indirectly through postponing
decisions and reintroducing uncertainly in the decision
processes than anyone appreciates," McMillan said.
The earlier cautious mood was reflected in the neutral
reaction to news that factory output in the euro zone grew at
its strongest pace in two years in August.
The dollar, as it has since the budgetary crisis, bore the
brunt of the early nervousness but pared losses on news of the
White House meeting. It was 0.08 percent lower against the safer
option of the yen, trading at around 98.48 yen.
The greenback also slipped 0.29 percent against the Swiss
franc at 0.9096 francs, while the euro rose 0.2
percent to $1.3568.
Adding to market worries, China said exports dropped 0.3
percent in September from a year earlier against expectations of
a 6 percent rise, while the annual inflation rate hit a 7-month
high of 3.1 percent, limiting the scope for rate cuts.
The decline in exports from the world's second-largest
economy has raised questions over the global recovery, which was
highlighted by the IMF last week when it trimmed its forecast to
the lowest since the global recession in 2009.
Brent crude hovered around $111 a barrel, while
copper rose 0.76 percent to close at $7,255.00 a tonne
as strong imports of the metal from top consumer China boosted
optimism about the outlook for demand.
U.S. oil prices rebounded as traders covered short positions
in the event U.S. politicians reach a deal to fund the
government and avert a debt default.
"We're trading back and forth on the changing perceptions of
what is happening in D.C. at this point," said Gene McGillian,
oil analyst with Tradition Energy in Stamford, Connecticut.
"You saw some short-covering on the latest news that the
Senate will have a plan. Nobody wants to be exposed if something
should change," McGillian said.
Brent crude futures fell 24 cents to settle at $111.04. U.S.
oil rose 39 cents to settle at $102.41.
German government bond yields held near three-week highs as
debt markets in Europe remained confident the United States
would resolve its fiscal stalemate.
Safe-haven German Bund futures closed 4 ticks down
at 139.75, while 10-year cash yields were flat at