GLOBAL MARKETS-Stocks set for quarterly gains, bond prices rise

Reuters - UK Focus

* Wall Street, European stocks trade flattish

* Oil prices decline as fears of Iraqi violence retreat

* Yen at 5-week high versus wobbly dollar (Updates prices)

By Herbert Lash

NEW YORK, June 30 (Reuters) - Global stock markets were ontrack for their fourth straight quarter of gains on Monday,aided by loose monetary policies from major central banks, whileconcerns about geopolitics and the world's economic health haveunderpinned government debt.

Stocks on Wall Street traded mixed, with the S&P 500 andNasdaq Composite indexes set to close a sixth straight quarterof gains - a streak not seen since the euphoria over technologyshares ended in 2000.

MSCI (NYSE: MSCI - news) 's all-country index, which tracksshares in 45 countries, rose 0.19 percent. It has gained morethan 4 percent this quarter, aided by the prospect that monetarypolicy in the major economies will remain accommodative forlonger, and was set to post a fourth straight quarter of gains.

In Europe, the FTSEurofirst 300 index of topregional shares retreated at the end, falling 0.05 percent toclose at 1,370.60. But it still posted fourth quarter in a rowof gains.

Major stock indexes are up for the first half of the yearand the S&P 500 has posted more than 20 record highs at theclose so far, even as the U.S. Federal Reserve trims itseconomic stimulus.

"The Fed and other global monetary forces have done theirbest to keep this market as liquid as possible, and thatliquidity is restricting investors from finding a place otherthan stocks and have enabled risk takers to stay confident,"said Rick Meckler, president of investment firm LibertyViewCapital Management in Jersey City, New Jersey.

Bond yields, expected to have risen after a run-up late lastyear, have broadly fallen. Barclays (LSE: BARC.L - news) ' Aggregate U.S. bond indexis up 3.82 percent in the first half as benchmark yields havefallen nearly half a percentage point.

The 10-year Treasury note rose 2/32 in price toyield 2.5232 percent.

The Dow Jones industrial average fell 19.06 points,or 0.11 percent, at 16,832.78. The Standard & Poor's 500 Index was up 0.61 points, or 0.03 percent, at 1,961.57. TheNasdaq Composite Index was up 12.28 points, or 0.28percent, at 4,410.21.

A sense of complacency in markets drew the attention of theBank for International Settlements - a forum of the world's topcentral banks - which warned on Sunday that markets wereincreasingly out of sync with shaky global growth prospects.

Several early warning signs indicate buildingvulnerabilities in the financial systems of several countries,it said.

Gold was steady near a two-month high, poised to set asecond-straight quarterly gain after political tensionsbolstered demand for the metal.

Spot gold was up $3.00 an ounce at $1,318.04 anounce, having hit a two-month high of $1,325.90 last week.

The dollar remained under pressure, awaiting this week'sbusy calendar of U.S. data, which includes the June non-farmpayrolls report on Thursday, a day earlier than usual due to theU.S. Independence Day holiday on July 4.

The dollar fell versus the yen to a six-week low of 101.21yen, and was last at 101.30, down 0.06 percent.

The euro, meanwhile, rose to a three-week high of $1.3667 and last changed hands at $1.3688, up 0.3 percent.

Brent crude oil dropped below $113 a barrel as fears of adisruption to oil output from Iraq receded after governmentforces launched a pushback against a Sunni militant insurgency.

Brent was down $1.03 at $112.27 a barrel. U.S. crude lost 93 cents to $104.81 a barrel.

(Reporting by Herbert Lash; Additional reporting by Anirban Nagin London; Editing by Dan Grebler)

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