* Oil prices jump, extend OPEC cut-related advance
* Dollar index slips as euro, pound gain
* Tech shares weigh down Wall Street
(Updates prices, changes comments, dateline; previous LONDON)
By Rodrigo Campos
NEW YORK, Dec 1 Brent crude futures rose to a
16-month high on Thursday on the heels of OPEC's agreement a day
earlier to cut output, while Treasury yields continued to climb
following the weakest monthly performance for global bonds in
almost 13 years.
The benchmark 10-year U.S. Treasury yield jumped to its
highest since July 2015 to start the month, after Bank of
America Merrill Lynch's Global Broad Market Index fell 1.76
percent in November -its steepest monthly percentage drop since
a 2.06 percent fall in July 2003.
Bets on faster inflation in the United States, on the back
of higher oil prices and the expected policies of the incoming
Trump administration, have sent Treasury yields soaring.
"You're seeing the market pricing in higher inflation in the
near term," said Gennadiy Goldberg, interest rate strategist at
TD Securities in New York.
The 10-year U.S. Treasury yield hit a session
high at 2.492 percent. Benchmark 10-year notes last
fell 21/32 in price to yield 2.4426 percent.
Yields were pressured higher after data showed U.S. factory
activity accelerated to a five-month high in November amid a
pickup in new orders and production, offering more evidence that
the economy gained further momentum early in the fourth quarter.
The dollar index, which closed its second consecutive
month of gains above 3 percent, slipped 0.45 percent. The
British pound strengthened against the greenback for the
seventh time in nine sessions.
The euro rose 0.58 percent to $1.0646.
On Wall Street, declines in technology shares weighed on the
Nasdaq Composite and the S&P 500. With the backdrop of higher
interest rates, investors are likely to trim exposure to
companies with high price-to-earnings ratios, which include some
of the largest tech names, according to Kim Forrest, senior
equity research analyst, Fort Pitt Capital Group in Pittsburgh.
"In a higher rate environment you are going to want to pay
less for growth further out, to a large extent that is probably
what is happening in the higher P/E stocks," she said.
The Dow Jones industrial average rose 63.21 points,
or 0.33 percent, to 19,186.79, the S&P 500 lost 8.63
points, or 0.39 percent, to 2,190.18 and the Nasdaq Composite
dropped 74.52 points, or 1.4 percent, to 5,249.16.
The pan-European FTSEurofirst 300 index ended down
0.59 percent, while MSCI's gauge of stocks across the globe
fell 0.21 percent.
Emerging market stocks fell 0.5 percent.
The Organization of the Petroleum Exporting Countries agreed
on Wednesday to its first oil output reduction since 2008 after
the group's leading producer Saudi Arabia accepted "a big hit"
and dropped a demand that arch-rival Iran also slash output.
The deal also included OPEC's first coordinated action in 15
years with non-member Russia. Azerbaijan said it was also
willing to discuss cuts.
U.S. crude last rose 3.0 percent to $50.91 a barrel
and Brent traded at $53.74, up 3.7 percent on the day.
Spot gold sank to its lowest in nearly 10 months but
later pared losses and was last down 0.07 pct at $1,171.87 an
(Reporting by Rodrigo Campos, additional reporting by Richard
Leong, Chuck Mikolajczak and Sam Forgione; Editing by Bernadette
Baum and Andrew Hay)