U.S. Markets closed

GLOBAL MARKETS-U.S. shares edge up on U.S. budget deal hopes, yen gains

* 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

1.86 percent.