* World stocks up 0.6 pct, set for 3rd monthly rise
* U.S. stocks open higher after Bullard comments
* US dollar falls; Brent crude oil inches lower
(Adds opening of U.S markets, changes byline, dateline, previous LONDON)
By Caroline Valetkevitch
NEW YORK, Feb 28 (Reuters) - Major stocksmarkets rose on Monday, with worries about the effect of high energy prices on U.S. economic growth easing slightly, while the dollar hit a 3-1/2-month low against a basket of major currencies.
World equities measured by MSCI All-Country World Index <.MIWD00000PUS> added 0.6 percent after rising 1.1 percent on Friday. The global index is up 2.3 percent this month, on track for a third straight monthly rise.
Comments by James Bullard, president of the St. Louis Federal Reserve, that the U.S. economy should do well in 2011 and that oil prices are not currently a drag on the recovery helped to boost U.S. stocks.
"Bullard was right that oil prices won't put a crimp in activity unless they get substantially higher," said Malcolm Polley, president of Stewart Capital Advisors in Indiana, Pennsylvania. "But if gas prices remain at a sustained level, that will eat into people's discretionary dollars."
Just after the open, the Dow Jones industrial average <.DJI> was up 62.44 points, or 0.51 percent, at 12,192.89. The Standard & Poor's 500 Index <.SPX> was up 6.99 points, or 0.53 percent, at 1,326.87. The Nasdaq Composite Index <.IXIC> was up 16.27 points, or 0.59 percent, at 2,797.32.
Brent crude oil prices inched lower. Worries over supply
disruption from the Middle East and North Africa caused prices
to spike last week. Brent crude
Revolt in Libya has cut as much as three quarters of the country's oil output, prompting Saudi Arabia to step in and plug the supply gap to Libya's oil buyers.
Brent crude is up more than 10 percent this month, heading towards its sixth straight month of rises. It touched a 29-month high of near $120 a barrel last week.
The U.S. dollar hit a 3-1/2-month low versus a currency basket as investors speculated the Fed will lag other central banks in raising interest rates to counter inflation risks.
The ICE futures exchange's dollar index <.DXY>, which tracks the greenback's performance against a basket of major currencies, skidded earlier to its lowest level since Nov. 9.
U.S. Treasury prices were little changed after data showed higher-than-forecast Chicago purchasing managers index.
The benchmark 10-year U.S. Treasury note was unchanged with
the yield at 3.4161 percent
U.S. Treasuries earlier were supported by New York Fed President William Dudley's assertion that the Fed was "very far" from achieving its dual mandate of maximum sustainable employment and price stability and should be wary of withdrawing monetary policy support.
In Europe, the pan-European FTSEurofirst 300 <.FTEU3> index
of top shares was up 1.1 percent at 1,172, helped by
agrochemical stocks after positive comments on the sector from
Bayer
According to fund tracker EPFR Global, a growing aversion to risky assets in the latest week fueled the biggest flows to global bond funds in more three months, and turned more investors away from emerging market stocks. [ID:nN25262438]
The rotation out of emerging markets into developed markets, partly driven by inflation concerns in emerging economies, have led to outperformance in developed markets. The MSCI emerging market index <.MSCIEF> has lost 4.2 percent this year.
But Credit Suisse's private bank expected the fund rotation to ease in the second quarter. (Additional reporting by Ryan Vlastelica and Ellen Freilich in New York; Dominic Lau, Neal Armstrong and Naomi Tajitsu in London; and Florence Tan in Singapore)