GLOBAL MARKETS-Stocks end higher, dollar briefly touches 3-year high

Mon Jul 8, 2013 5:37pm EDT

* Wall St. up on earnings, jobs, European shares end up 1.4
pct
    * Dollar recedes from 3-year high vs currency basket
    * Oil pulls back after gains on Egypt


    By Caroline Valetkevitch
    NEW YORK, July 8 (Reuters) - Global stock indexes climbed on
Monday as the upcoming U.S. earnings season added to investor
optimism after last week's robust U.S. jobs data, while the
dollar edged off three-year highs against major currencies.
    Oil prices declined after rising sharply on unrest in Egypt,
which stoked concerns about global supplies.
    The upbeat U.S. jobs data on Friday reassured investors the
U.S. economy was still strengthening but also fueled some
concern the Federal Reserve could soon start reducing its $85
billion a month stimulus. 
    The improved view of the economy, combined with investors
turning their attention to earnings season with Alcoa 
reporting after the close, helped send equities higher, said
Bucky Hellwig, senior vice president at BB&T Wealth Management
in Birmingham, Alabama. 
    "There's really not a reason to sell stocks today," Hellwig
said. "There's a high level of comfort with the earnings season
and with the strong job market."
    The majority of S&P 500 companies tend to beat analysts'
expectations for earnings.
    MSCI's global share index was up 0.4
percent. Europe's broad FTSEurofirst 300 stock index
ended 1.4 percent higher.
    On Wall Street, the Dow Jones industrial average was
up 88.85 points, or 0.59 percent, at 15,224.69. The Standard &
Poor's 500 Index was up 8.57 points, or 0.53 percent, at
1,640.46. The Nasdaq Composite Index was up 5.45 points,
or 0.16 percent, at 3,484.83. 
    The dollar index, which measures the value of the
greenback versus a basket of six major currencies, fell 0.3
percent to 84.204, having hit 84.588, its strongest since July
2010.
    Expectations the U.S. economic recovery is leading the rest
of the world and that the Fed will reduce its bond-buying have
sparked a nearly 5 percent rally in the dollar since mid-June,
prompting some traders to say the move had been too fast.
    Focus is shifting to Wednesday's release of the minutes from
the Fed's June policy meeting. A Reuters poll of firms that deal
directly with the Fed now sees the reduction beginning in
September.
    "Our conviction is strong that the dollar will embark on a
structural ascent, against a broad range of currencies," said
Stephen Jen, a managing partner at London-based hedge fund SLJ
Macro Partners.
    
 
 
    BOND PRICES BOUND BACK
    U.S. Treasuries prices climbed on buying by bargain-minded
investors, helping to bring benchmark yields down from near
two-year highs.
    A Reuters poll conducted after the release of Friday's 
government payrolls data - which showed U.S. employers added
195,000 jobs in June - found more than half of the major Wall
Street bond firms surveyed expected the Fed would reduce its $85
billion monthly purchases of Treasuries and mortgage-backed
securities in September.
    The 10-year Treasury note last traded 26/32
higher in price to yield 2.638 percent.
    "Today we are trying to find a range before this week's
supply. Some people are thinking maybe Friday was overdone,"
said Thomas Roth, executive director of U.S. government bond
trading at Mitsubishi UFJ Securities USA in New York. 
    The divergence between the United States and other major
economies is clear in bond markets, with 10-year Treasury yields
spiking 23 basis points on Friday to around 2.75 percent, highs
last seen in August 2011. The spread between Treasury and bund
yields gapped to the widest since 2006.
    The U.S. Treasury Department will sell $32 billion of
three-year notes on Tuesday; $21 billion of 10-year notes on
Wednesday and $13 billion of 30-year bonds on Thursday.
    
    BRENT DECLINES
    Brent crude oil fell as news of the returns of a Libyan
oilfield and an Iraqi pipeline eased concerns about global oil
supplies after unrest in Egypt. Libya's major Sharara oilfield
will resume operations after an agreement was reached with the
armed group that shut it down last month, a senior Libyan oil
source said on Monday.
    Brent crude, the European benchmark, fell 29 cents
to settle at $107.43 a barrel, after hitting $108.04, the
highest since April 4. U.S. light crude was down 8 cents
at $103.14, after earlier touching a new 14-month high of
$104.12.
    "The market is a bit less concerned about a major disruption
in Egypt, and was probably overbought a little bit going into
the holiday weekend," said Phil Flynn, energy analyst at Price
Futures Group.
    Gold rose as the rally in the dollar paused and as investors
found value following a two-day slide. Spot gold rose to
a session high of $1,238.30 an ounce.
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A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

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