* U.S. stocks open higher after six days of losses
* Euro reverses gains after Trichet's comments
* ECB is strongly vigilant on inflation -- Trichet (Updates prices, adds comment, adds byline)
By Wanfeng Zhou
NEW YORK, June 9 (Reuters) - The euro fell against the U.S. dollar on Thursday after the president of the European Central Bank signaled an interest-rate increase next month as had been widely expected, while U.S. and European stocks rebounded after six days of losses.
Crude oil prices drifted higher, a day after OPEC failed to raise production targets, though they pared gains as the U.S. dollar strengthened following the ECB meeting.
The ECB left its benchmark interest rates at 1.25 percent as expected. In a news conference following the decision, ECB President Jean-Claude Trichet said the central bank is in "strong vigilance" mode over inflation, using a code word to signal a rate hike is probably only a month away. For more, see [ID:nFAT007213]
The euro initially rose on the comments before retreating, with analysts saying a hike in July had already been priced in. Persistent worries about debt problems in Greece and other peripheral euro zone economies also dented sentiment.
"The euro has slipped in what appears to be a 'buy the rumor, sell the fact' reaction," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. "We also suspect that negative headlines on Greece and wider regional debt concerns are raising some question marks over the prospects for ongoing ECB policy tightening and euro strength."
The euro last traded 0.6 percent lower at $1.4483
U.S. stocks rose as a narrowed U.S. trade deficit was seen as one positive point for growth in a recent avalanche of weak economic data. But the mood remained fragile with many analysts expecting the S&P 500 to retest its March 2010 lows after falling more than 6 percent since a peak in May.
"We're basically trading off technicals," said William Larkin, a portfolio manager with Cabot Money Management in Salem, Massachusetts.
"We're going to be in a very active trading range, and we just need a couple of key warnings -- on consumer confidence, energy prices, whatever -- and markets could continue to weaken."
The Dow Jones industrial average <.DJI> was up 83.89 points, or 0.70 percent, at 12,132.83. The Standard & Poor's 500 Index <.SPX> was up 9.62 points, or 0.75 percent, at 1,289.18. The Nasdaq Composite Index <.IXIC> was up 10.09 points, or 0.38 percent, at 2,685.47.
World stocks as measured by the MSCI world equity index <.MIWD00000PUS> rose 0.4 percent. The Thomson Reuters global stock index <.TRXFLDGLPU> gained 0.3 percent. Emerging market stocks <.MSCIEF> dropped 0.7 percent.
The FTSEurofirst 300 <.FTEU3> index of top European shares advanced 1 percent at 1105.346 points.
PERIPHERAL WORRIES
Greek, Irish and Portuguese bonds came under pressure, pushing spreads over German Bunds wider after Moody's said a Greek default would also impact the credit ratings of other bailed out countries.
Moody's also said it was hard to imagine resolving Greece's debt crisis with private investors participating on a voluntary basis [ID:nFAB016108].
A new international bailout being put together for Greece is likely to total around 120 billion euros, euro zone official sources said on Thursday. That was higher than the 90 billion euro figure previously suggested by officials. See [ID:nLDE75819V]
In the oil market, U.S. crude for July delivery
Concerns about supply bolstered prices as investors assessed the impact of OPEC's failure to agree on a rise in output supported prices. Oil prices are at levels that governments around the world fear are hurting demand and threatening economic recovery.
U.S. Treasury yields dipped to six-month lows as a rise in U.S. weekly jobless claims added to recent evidence the economic recovery is stumbling, bolstering the safe-haven appeal of U.S. government debt.
Benchmark 10-year notes