Stocks rally worldwide, crude rebounds on supply

NEW YORK (Reuters) - Global equity markets rallied on Tuesday, lifted by mining companies in Europe and surging technology shares on Wall Street, while crude oil rebounded on indications that supply is gradually tightening, especially in the United States.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 16, 2017. REUTERS/Brendan McDermid

U.S. stocks surged, with information technology shares .SPLRCT rising 1.45 percent, while European shares snapped a three-day losing streak in a broad advance.

A 2.1 percent slide in the benchmark S&P 500 index over the past two weeks led investors to step in, said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.

“Every time we get a pull-back it’s the same damn thing,” said Dick, calling market conditions the most resilient he has seen in his 18 years. “It’s a ‘buy the dip’ mentality market and it doesn’t go away. They call it a correction now, 2 percent!”

U.S. Treasury and gold prices fell ahead of an annual meeting this week of central bankers in Jackson Hole, Wyoming. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are among the scheduled speakers.

A broadly resurgent U.S. dollar prompted investors to square positions in a thin market before the central bank conference, an annual event organized by the Kansas City Fed, begins on Thursday.

With investors caught between a generally benign economic backdrop that prevents too much of a sell-off without a catalyst for new highs, “We do seem to be settling into more of a range-bound market,” said Larry Hatheway, chief economist at asset manager GAM.

A gauge of global equity markets, MSCI's all-country world stock index <.MIWD00000PUS) rose 0.69 percent, while its emerging markets index .MSCIEF gained 0.83 percent.

Wall Street indexes were also helped by 1.2 percent gains in materials .SPLRCM and healthcare .SPXHC stocks.

The Dow Jones Industrial Average .DJI closed up 196.14 points, or 0.9 percent, to 21,899.89. The S&P 500 .SPX gained 24.14 points, or 0.99 percent, to 2,452.51, and the Nasdaq Composite .IXIC climbed 84.35 points, or 1.36 percent, to 6,297.48.

In Europe, the FTSEurofirst 300 index .FTEU3 of leading European shares rose 0.9 percent.

British subprime lender Provident Financial PFG.L tumbled 66 percent, its biggest-ever daily drop. The firm issued its second profit warning in two months, canceled its dividend and said its chief executive was leaving.

Still, the overall blue-chip FTSE 100 equity index .FTSE closed up 0.94 percent, as a rally in base metals pushed copper to a three-year high and nickel to its strongest level in eight months on the London Metal Exchange.

Copper CMCU3 rose to $6,642.50 a tonne, the highest level since November 2014, before paring gains to trade little changed at $6,584.00, while three-month nickel CMNI3 was bid up 1.2 percent at $11,445 a tonne.

“There’s nothing really fundamental to drive things onwards from here, so I think it’s a bit of misplaced euphoria and trend-following buyers jumping on the bandwagon,” said Robin Bhar, head of metals research at Societe Generale in London.

Europe's basic resources sector .SXPP enjoyed a second session of gains and was the top-gaining sector, supported by a rally in iron ore prices.

Benchmark 10-year U.S. Treasury notes US10YT=RR were last down 10/32 in price to yield 2.2166 percent.

In European debt markets, Italian government bond yields jumped, stretching the gap with German bunds to a five-week high, in the wake of proposals to introduce a parallel currency in Italy that have upped the ante for elections due next year.

Italy's 10-year bond yield, which moves inversely to the price, climbed 8 basis points to a three-week high at 2.11 percent IT10YT=TWEB, its biggest daily rise in a month.

Oil prices rose. Benchmark Brent crude LCOc1 settled 21 cents higher at $51.87 a barrel, while U.S. light, sweet crude CLc1 rose 27 cents to settle at $47.64 a barrel.

“U.S. crude oil stocks have been falling consistently in recent weeks,” said Fawad Razaqzada, market analyst at futures brokerage

The dollar rallied after falling for two straight days, benefiting from the euro's decline following weaker-than-expected euro zone data as well as investors adjusting positions ahead of the central bank conference in Jackson Hole. The dollar index .DXY rose 0.43 percent against a trade-weighted basket of its currencies, to 93.497. The euro EUR= slid 0.45 percent against the greenback to $1.1761, retracing most of its overnight gains when it posted its biggest single-day rise so far this month. Spot gold XAU= was down 0.43 percent at $1,285.20 an ounce.

Reporting by Herbert Lash; Editing by Nick Zieminski and Leslie Adler