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* Oil bounces back on pickup in gasoline demand

* Safe-haven yen, government debt cut gains

* Global gauge of stocks drops, but Wall St edges higher

By Dion Rabouin

NEW YORK, Feb 24 (Reuters) - A sharp rebound in crude prices lifted stocks on Wall Street on Wednesday, but a gauge of equities across the globe fell on lingering concern about economic growth.

Crude turned higher after data showed U.S. gasoline demand spiked over the past four weeks from a year ago, and inventories of motor fuel slid from record highs.

The S&P 500 climbed steadily after the U.S. gasoline data, turning positive just ahead of oil’s close. It was last up after falling as much as 1.6 percent.

“As much as it frustrates people, the reality is (oil and equities) are incredibly highly correlated and they have been really going back to November,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas. “It’s that simple.”

The Dow Jones industrial average was up 36.98 points, or 0.23 percent, to 16,468.76; the S&P 500 gained 6.33 points, or 0.33 percent, to 1,927.6, and the Nasdaq Composite added 30.88 points, or 0.69 percent, to 4,534.46.

The turn in the S&P contrasted with a fall in European stocks, which were weighed by energy and commodity sector names.

The pan-European FTSEurofirst 300 share index fell 2.3 percent and MSCI’s gauge of stocks globally fell 0.7 percent.

Nikkei futures edged down less than 0.1 percent.

OIL REBOUNDS

Government data showed U.S. crude oil stockpiles rose by 3.5 million barrels in the United States last week to an all-time peak. But the increased gasoline demand over the past four weeks and a drop in inventories helped push crude futures higher.

Brent crude, the global benchmark, rose 3.5 percent to $34.44 a barrel. U.S. crude added 1 percent to $32.20.

The turn in oil and stocks pushed yields on the lowest-risk government bonds slightly higher, though they were still lower on the day.

Benchmark 10-year U.S. notes were last up 2/32 in price to yield 1.734 percent on Wednesday. At their session low the yield was 1.647 percent.

In currency markets, the yen, often sought by investors as a shelter when riskier assets are under pressure, reached an almost three-year high against the euro of 123.43 yen. It was last up 0.3 percent at 123.03. At 111.82, the yen was up 0.25 percent against the U.S. dollar.

The euro dipped 0.1 percent versus the greenback to $1.1005. The dollar index was flat.

Sterling plumbed a seven-year low of $1.3876 on concerns Britons might vote to leave the European Union in a June referendum. It last traded down 0.7 percent at $1.3924.

Copper slipped 0.1 percent to $4,641.85 a tonne.

Gold retreated from major gains earlier in the day, last trading up 0.1 percent. It had risen as much as 2.1 percent. (Reporting by Dion Rabouin; additional reporting by Rodrigo Campos; Editing by Nick Zieminski and Steve Orlofsky)