GLOBAL MARKETS-World stock markets up near record high; low yields help

Mon Jun 9, 2014 3:07pm EDT

* Wall St rallies as low yields buoy stocks
    * Treasury prices slip as U.S. supply weighs
    * Euro hurt by widening interest rate differentials
    * Brent crude rises above $109 on strong global growth

 (Adds oil settlement prices)
    By Herbert Lash
    NEW YORK, June 9 (Reuters) - Global equity markets traded
higher on Monday, although they pared gains from levels close to
an all-time high, as low interest rates bolstered sentiment even
as U.S. Treasury yields rose.
    Wall Street's benchmark S&P 500, which had been poised to
post its seventh record close in eight trading sessions,
retreated and traded flat. The Dow and Nasdaq were higher in
late trade.
    Asian stocks touched their highest levels in nearly three
years. Europe also advanced as Spain, Italy and Portugal spurred
regional indices on bets those markets would benefit most from
last week's European Central Bank stimulus measures.
    Peripheral European bond yields set record lows, with S&P's
upgrade of Ireland's credit pushing it to a record low of 2.39
percent. Spanish 10-year yields fell below those of U.S.
Treasuries for the first time since April 2010, and Italian
five-year yields were also below U.S. equivalents. 
    The low European yields highlighted the policy divergence
between the ECB and the Federal Reserve, which is reining in its
monetary stimulus. But with U.S. yields low, some investors 
prefer equities over bonds.
    "The support is coming from extremely low bond yields and
action in Europe, so it gives investors no real alternative, no
real reason to sell stocks," said Rick Meckler, president of 
LibertyView Capital Management in Jersey City, New Jersey, who
also cited merger and acquisition deals.
    MSCI's all-country world share index, which
gauges stock performance in 45 countries, was up 0.08 percent at
426.87, just shy of its November 2007 peak of 428.63.
    The pan-European FTSEurofirst 300 index advanced
0.38 percent to close at 1,393.71, near a January 2008 high.
    The Dow Jones industrial average rose 12.89 points,
or 0.08 percent, at 16,937.17. The Standard & Poor's 500 Index
 was up 0.29 points, or 0.01 percent, at 1,949.73. The
Nasdaq Composite Index was up 8.54 points, or 0.20
percent, at 4,329.94. 
    U.S. Treasuries prices fell, pressured by this week's $62
billion sale of new coupon-bearing debt and increased risk
appetite after Friday's strong U.S. jobs report.
    Benchmark 10-year notes were last down 5/32 in
price to yield 2.6131 percent.
    Among major currencies, the dollar continued to
benefit from rising U.S. Treasury yields. The dollar index
 was up 0.29 percent.
    The euro drifted as low as $1.3583 as the dust settled after
last week's ECB activity. The euro last traded down 0.40 percent
at 1.3587 against the dollar.
    Brent crude rose as strong Chinese and U.S. data pointed to
healthy economic growth and higher demand from the world's top
two consumers.
    Brent rose $1.38 to settle at $109.99 a barrel. U.S.
oil rose $1.75 to settle at $104.41.

 (Reporting by Herbert Lash; Editing by Dan Grebler)
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