* Global equity markets down; Wall St falls in late selloff
* Yen rallies, euro drops as deflation hits bloc
* Gold posts best month in four years
(Updates to U.S. market close)
By Dion Rabouin
NEW YORK, Feb 29 (Reuters) - A gauge of stocks across the
globe on Monday posted its fourth straight month of declines,
while crude oil notched its first positive month since October.
Gold closed February with a gain of more than 10 percent,
the most for any month in four years.
Stocks rose through most of the U.S. session after China's
central bank resumed its easing cycle by injecting an estimated
$100 billion worth of long-term cash into the economy.
But Wall Street sold off into the close and the global
stocks gauge finished in the red.
Equity markets so far this year have been strongly
correlated with crude oil futures, which earlier this month
tanked to decade lows. On Monday, however, U.S. stocks reversed
the correlation and fell as investors took profits on last
equity week's gains.
"The market's had a big run, so I don't think it's anything
drastic, just lightening up after a big pop," said J.J. Feldman,
portfolio manager at Miracle Mile Advisors in Los Angeles.
On Monday, the Dow Jones industrial average .DJI fell
123.47 points, or 0.74 percent, to 16,516.5, the S&P 500 .SPX
lost 15.82 points, or 0.81 percent, to 1,932.23 and the Nasdaq
Composite .IXIC dropped 32.52 points, or 0.71 percent, to
4,557.95.
For the month, the Dow rose 0.3 percent, the S&P 500 lost
0.4 percent and the Nasdaq lost 1.2 percent.
MSCI's global stocks index .MIWD00000PUS fell 0.9 percent
for the month, bringing its decline since November to 9.6
percent.
Oil prices jumped after China moved to boost its slowing
economy. A drop in crude output from OPEC and the United States,
and a pledge by Saudi Arabia to limit market volatility,
suggested a 20-month selloff could be hitting a bottom.
"We have to accept the fact that crude is going to work its
way higher from here," said Jeffrey Grossman, energy dealer at
New York's BRG Brokerage.
Brent futures LCOc1 settled up 2.5 percent at $35.97 a
barrel. U.S. crude futures CLc1 settled up 3 percent at
$33.75. Both rose in February for the first month in four.
Long-dated U.S. Treasury prices rose after weak U.S. housing
data supported the view that the Federal Reserve could slow the
pace of interest rate hikes this year. Recent U.S. economic
reports, including a pick-up in inflation, had shifted the view
the Fed could raise interest rates before year-end.
The benchmark 10-year note US10YT=RR was last up 8/32 in
price to yield 1.738 percent, down from 1.764 percent late on
Friday. U.S. Treasuries prices showed a second month of gains.
The dollar .DXY rose 0.1 percent against a basket of six
major currencies, backed largely by a move down from the euro
EUR= .
The euro hit $1.0859, its lowest against the dollar since
the start of the month, after consumer prices in Europe fell
again. A drop in the flash reading of euro zone inflation to
-0.2 percent boosted expectations that the European Central Bank
will have to ease policy aggressively next month.
But the dollar tumbled against the Japanese yen JPY= ,
losing around 1 percent, as investors sought its safety. The yen
appreciated nearly 7 percent versus the greenback in February,
its best monthly performance against the dollar in more than
seven years.
Gold, another investor "safe haven," rose 1.3 percent on
Monday to close its best month since January 2012.