GLOBAL MARKETS-Stocks rebound after S&P 500 correction, safe-haven gold touches record

By Sinéad Carew and Naomi Rovnick

NEW YORK/ LONDON, March 14 (Reuters) - U.S. equities followed European stocks higher on Friday to end a bumpy week on a positive note, although safe-haven gold hit a record high with investors still showing some signs of anxiety about the economic impact of tariffs.

German government bond yields and the euro rose on Friday, with German Chancellor-in-waiting Friedrich Merz saying he had secured crucial backing from the Greens for a massive increase in state borrowing.

Germany's news helped boost U.S. Treasury yields, according to Garrett Melson, portfolio strategist at Natixis Investment Managers, who also attributed equity gains on Friday to the S&P 500 confirming it was in a correction on Thursday.

"It's been a sharp decline from the highs in mid-February," said Melson.

"You're seeing some signs of it at least getting an intermediate low and a little bit of a relief rally," he said. "There's not really anything meaningful in the way of news to really drive a rally other than just the technicals."

On Wall Street, the Dow Jones Industrial Average .DJI closed up 674.62 points, or 1.65%, at 41,488.19 while the S&P 500 .SPX rose 117.42 points, or 2.13%, to 5,638.94 for its biggest one-day percentage gain since Nov. 6, the day after the U.S. election.

The benchmark S&P index had finished Thursday more than 10% below its February record close after U.S. President Donald Trump threatened to impose a 200% tariff on European wine and spirit imports, the latest trade war escalation after Europe retaliated against U.S. tariffs on steel and aluminium.

Last week the Nasdaq .IXIC confirmed it was in a correction, driven lower by tariff and growth uncertainties as well as high valuations for megacap tech stocks. The Nasdaq Composite .IXIC ended up 451.07 points, or 2.61% at 17,754.09 on Friday, for its biggest daily gain since November 6.

MSCI's broadest gauge of global stocks .MIWO00000PUS rose 14.73 points, or 1.79%, to 836.32 on Friday, but still showed its biggest weekly fall since December.

Earlier, the pan-European STOXX 600 .STOXX index closed up 1.14%.

Spot gold XAU= breached $3,000 an ounce for the first time in early London trading, before losing ground to last trade down 0.17% to $2,982.72 an ounce. The precious metal is still up close to 14% year-to-date, as trade wars and growth worries boost its safe-haven appeal.

In fixed income, the yield on the benchmark German 10-year Bunds DE10YT=RR was last at 2.876% after earlier rising as high as 2.936%.

U.S. Treasury yields rose as the stock market recovery reduced safe-haven demand for U.S. government debt.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 4.2 basis points to 4.318%, from 4.276% late on Thursday, while the 30-year bond US30YT=RR yield rose 2.9 basis points to 4.6248%.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 7 basis points to 4.023%, from 3.953% late on Thursday.

"What you've had over the past week or two is a repricing of what's called the Trump put lower for equities, while at the same time, understanding that tariffs are probably here to stay in some form and aren't just a negotiating tactic," said Zachary Griffiths, senior strategist at CreditSights.

In currencies, the euro gained broadly on optimism about Germany. Against the dollar, the euro EUR= was up 0.28% at $1.0882 while against the pound EURGBP=D3 it gained 0.44% and rose 0.63% against the Swiss franc EURCHF=EBS.

Against the Japanese yen JPY=, the dollar strengthened 0.55% to 148.62. Against the Swiss franc CHF=, the greenback strengthened 0.33% to 0.885, supported by hopes the U.S. government would avoid a shutdown over the weekend.

Oil prices rebounded 1% to end the week nearly unchanged as investors weighed the diminishing prospects of a quick end to the Ukraine war that could bring back more Russian energy supplies to Western markets.

Brent crude futures LCOc1 settled 70 cents, or 1%, higher at $70.58 a barrel, after falling 1.5% in the previous session. U.S. West Texas Intermediate crude CLc1 closed at $67.18 a barrel, up 63 cents, or 1%, after losing 1.7% on Thursday.

Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had closed up almost 1% but lost almost 1.5% for the week.