GLOBAL MARKETS-Stocks rally, dollar firms on central bank move

(Recasts with U.S. markets, adds byline; dateline previous LONDON)

By Herbert Lash

NEW YORK, March 11 (Reuters) - A move by the U.S. Federal Reserve and other central banks on Tuesday to inject cash-starved markets with massive dose of funds sparked a global stock rally and clipped a new surge in oil prices to almost $110 a barrel.

In the latest concerted effort to ease tight credit markets and bolster flagging economies, the Fed and the European Central Bank, along with the central banks of Canada, Britain and Switzerland, announced various measures to boost liquidity.

The move reversed a recent slide in global equity markets and stopped a seemingly daily march in prices of oil and precious metals, including gold, to new highs in New York and London.

"The Fed action is significant, well telegraphed and seems to be working," said Andrew Brenner, a senior vice president at MF Global in New York. "With $200 billion announced last week this is another $200 billion. With $400 billion in liquidity we are now talking some real coin," Brenner said.

The dollar retreated from an all-time high against the euro and jumped more than 1 percent off eight-year lows against the yen.

Oil prices pared gains after setting a record for the fifth straight day, while gold, which has paused on a march toward $1,000 an ounce, fell as the dollar strengthened.

U.S. government bond prices plunged as investor fears for the worst and a safe-haven bid eased.