* Wall Street gains with help from Fed's Fischer
* Safe-haven bond prices fall; U.S. dollar rises
* Gold slips for second straight session
(Updates prices, changes comment, byline)
By Rodrigo Campos
NEW YORK, Aug 11 A global gauge of equities rose
for a second day on Monday, posting its largest daily advance in
four months as investors bet on a reduced risk of direct
conflict between Russia and Ukraine while tensions in Gaza eased
as a new 72-hour truce appeared to be holding.
In a continued exodus from safety assets, the yields of U.S.
debt rose slightly as investors sold bonds, nudging prices down.
Spot gold prices also fell.
An index of Russian stocks jumped 2.8 percent after
sliding over the past four weeks.
On Monday, the Kremlin ruled out a unilateral humanitarian
operation in eastern Ukraine, which NATO had feared would serve
as a cover for Moscow to invade its neighbor. Still, Russia said
it was sending an aid convoy to Ukraine in collaboration with
representatives of the International Committee of the Red Cross.
NATO, however, still sees a "high probability" of a Russian
invasion after it said some 20,000 Russian troops massed on the
nearby border. Kiev had the number at 45,000 Russian troops.
Investors also monitored Iraq, where the United States
recently launched air strikes targeting Islamic State fighters
marching on the country's Kurdish capital. It was unclear
whether Nuri al-Maliki would bow to U.S. and Iranian pressure to
step aside after Iraq's president named a new prime minister.
"At least for the time being, the situation in Ukraine
appears fairly contained," said Eric Teal, chief investment
officer of First Citizens Bancshares Inc in Raleigh, North
Carolina, adding that "despite some of the military unrest, the
Iraqi crisis looks to be going on a more limited scope and not
having a significant impact on the commodity market."
U.S. stocks also got a lift from comments by Federal Reserve
Vice Chairman Stanley Fischer, who said long-run annual growth
in the United States may now be perhaps as low as 2 percent, a
full percentage point below the estimate of Fed policymakers as
recently as 2009. His remarks may cool more hawkish expectations
that the Fed is ready to start a tightening cycle in monetary
policy sooner than many in markets expect.
The Dow Jones industrial average rose 52.04 points or
0.31 percent, to 16,605.97. The S&P 500 gained 10.18
points or 0.53 percent, to 1,941.77. The Nasdaq Composite
added 37.52 points or 0.86 percent, to 4,408.42.
An MSCI index of stocks traded in major markets around the
world shot up 0.9 percent, though it was still
down 3 percent from a record closing high set early in July.
The pan-European FTSEurofirst 300 index jumped 1.3
percent after losing 2 percent last week.
Yields on 10-year U.S. debt retraced from last week's
14-month lows following a 72-hour truce between Israelis and
Palestinians as both sides sought to end their month-old war in
On below-average volume, the yield on the 10-year U.S.
Treasury note was last at 2.4203 percent, up 5 basis
points for the day. On Friday, it briefly fell to 2.349 percent,
a level not seen since June 2013.
The euro remained under pressure against the U.S. dollar on
expectations of monetary policy easing from the European Central
Bank and the effect of sanctions on Russia.
"The euro remains in a sell-the-rally mode as growth in the
region is threatened by the ongoing conflict with Russia, which
is likely to have a particularly negative impact on German
growth," said Boris Schlossberg, managing director of FX
strategy at BK Asset Management in New York.
Germany is Russia's largest trading partner in the European
Union. EU sanctions announced last month restrict the export to
Russia of equipment to modernize the oil industry and prohibit
the sale of machinery, electronics and other civilian products
that can be used for military or defense purposes.
The euro was down 0.2 percent on the day against the dollar
U.S. crude oil and Brent crude futures were
mixed, with U.S. crude ticking up 21 cents to $97.86 per barrel
and Brent crude edging down 17 cents to $104.85.
Spot gold slipped 0.2 percent to $1,306 an ounce.
(Additional reporting by Gertrude Chavez-Dreyfuss, Ryan
Vlastelica and Richard Leong; Editing by Jan Paschal)