* Wall Street stocks rise modestly in subdued trade
* U.S. bond markets shut for Veterans Day
* Gold slides to 3-1/2 week low on low inflation
* Oil rises toward $106 after China data, no Iran deal
By Ellen Freilich
NEW YORK, Nov 11 Wall Street and other major
world stock indexes rose modestly on Monday, but with U.S. bond
markets and banks closed for the Veterans Day holiday, trading
The dollar's rally against the euro paused after two days of
strong gains amid continued discussion over when the Federal
Reserve might scale back its stimulus, while gold slid to a
3-1/2 week low on low inflation.
Brent crude oil rose to $106 a barrel after Iran and
six world powers did not reach a deal on Tehran's nuclear
program and after Chinese data pointed to a rise in fuel demand
in the world's biggest energy consumer. U.S. light crude
was up 15 cents at $94.75.
Signs of a solid U.S. recovery boosted world equity markets
despite concerns that the Federal Reserve might reduce its
Surprisingly strong U.S. jobs data last week coaxed forward
some expectations for when the Fed might start tapering its
"Markets seem to be waiting for a lot of questions to be
answered," said Brian Jacobsen, chief portfolio strategist at
Wells Fargo funds Management in Menomonee Falls, Wisconsin.
"Some are waiting for the blueprint from the Chinese leadership
about reforms to come. Others are waiting to see what policy
response GDP and inflation data in Europe will bring from the
European Central Bank. And everyone is waiting to see if growth
in the United States is fast enough to merit a Fed taper, or if
inflation is too low to justify a taper-delay."
In afternoon trade, the Dow Jones industrial average
was up 10.73 points, or 0.07 percent, at 15,772.51. The Standard
& Poor's 500 Index was up 0.48 points, or 0.03 percent,
at 1,771.09. The Nasdaq Composite Index was up 1.30
points, or 0.03 percent, at 3,920.53
Fed officials, including Chairman Ben Bernanke, have sounded
cautious about the prospect for early tapering since the jobs
data, though many investors are waiting for Bernanke's nominated
successor, Janet Yellen, to give her views before the U.S.
Senate on Thursday.
A Reuters poll of U.S. primary dealers on Friday showed just
one of the 16 respondents expected tapering to begin in
December. Six voted for January, and the majority expected
tapering to start in March or later.
Meanwhile, expectations for U.S. growth helped lift European
shares by 0.3 percent, off one-week lows during a
Earlier, the recovery hopes had boosted Japan's Nikkei by a
hefty 1.3 percent, lifting it from one-month lows.
MSCI's global barometer of world shares
added 0.2 percent, though it was still down 1.7 percent from the
near six-year highs touched at the end of October, when it
seemed the Fed might not taper until well into next year.
Asian shares reflected the concern in emerging markets that
an early cutback in Fed stimulus and higher bond rates would
direct capital toward the United States.
MSCI's broadest index of Asia-Pacific shares outside Japan
shed 0.5 percent, hitting its lowest since Oct.
11 and extending Friday's 1 percent drop.
Emerging Asian currencies also came under pressure on the
capital outflow fears. The Indian rupee fell 1.3 percent to
63.281 per dollar and the Indonesian rupiah was
down 1 percent to 11,551 per dollar, a one-month low.
DOLLAR REBOUND STALLS
The dollar paused in its advance against the euro after two
days of strong gains, with a further rise seen depending on
whether U.S. bond yields keep rising amid an intensifying debate
on when the Federal Reserve might scale back its stimulus.
But the U.S. holiday kept many investors on the sidelines
and volumes low. While the euro managed to retrace some of its
recent losses, analysts cautioned against reading too much into
"It's a very quiet day with more of a relief bounce" in the
euro, said David Song, currency analyst at DailyFX in New York.
"The euro could be in line for another move lower from here."
The euro climbed to $1.3412 on lower-than-usual
volume, but gains were capped as investors began to sell it from
around $1.3400 through to $1.3410.
The euro hit a two-month low of $1.3295 last Thursday after
the European Central Bank shocked the market with a surprise cut
of its main interest rate to a record low 0.25 percent.
The euro zone currency was last trading up 0.3 percent at
Against the Japanese yen, the dollar gained 0.1
percent to 99.20 yen.
Speculators have cut long euro positions and the trend could
gather pace with the euro zone facing a prolonged period of
falling inflation. That could lead to the ECB deploying more
aggressive monetary easing instruments.
Although the ECB's rate-setting committee was split about
Thursday's decision to cut rates, Executive Board member Benoit
Coeure said on Saturday that the bank could trim interest rates
further and provide more liquidity.
In commodity markets, gold took a hit, sliding to a
three-and-a-half week low just under $1,280 an ounce to add to
Friday's 1.5 percent decline.