* Eyes on ECB meeting; euro zone fiscal stimulus prospect
* U.S. producer prices climb; Fed still expected to cut
* Oil drops on report Trump weighed easing Iran sanctions
(Updates with close of U.S. markets, oil settlement prices)
By Chuck Mikolajczak
NEW YORK, Sept 11 (Reuters) - A gauge of global equity
markets climbed on Wednesday on signs of gradual progress in the
trade war between the United States and China, while bond yields
rose as investors remained unconvinced what stimulus measures
the European Central Bank will provide at its meeting on
Thursday.
Stocks on Wall Street rose, with the S&P closing above the
3,000 mark for the first time since July 30, buoyed by optimism
on the trade front after China announced its first batch of
tariff exemptions for 16 types of U.S. products days ahead of a
planned meeting between trade negotiators. "Maybe a little bit of an olive branch. The market has been
sensitive to any developments on the China-U.S. trade war front
and this would be consistent with that," said David Joy, chief
market strategist at Ameriprise Financial in Boston.
The Dow Jones Industrial Average .DJI rose 227.61 points,
or 0.85%, to 27,137.04, the S&P 500 .SPX gained 21.54 points,
or 0.72%, to 3,000.93 and the Nasdaq Composite .IXIC added
85.52 points, or 1.06%, to 8,169.68.
The trade hopes also aided in pushing European shares to
close at a six-week high, with shares of the London Stock
Exchange ending the session up 5.9% after Hong Kong Exchanges
and Clearing 0388.HK made a surprise $39 billion takeover
approach. The pan-European STOXX 600 index .STOXX rose 0.85% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.72%, on pace for its sixth straight day of gains, its longest
winning streak in three months.
U.S. Treasury yields rose for a third day, tracking those in
the euro zone bond market, as investors were unsure about the
stimulus measures the ECB will employ, with a report late on
Tuesday that the central bank may delay quantitative easing
adding to the uncertainty. "There was an expectation that the ECB would be aggressive
with easing," said Tom Simons, economist at Jefferies in New
York. "If they're not, that kind of changes the calculus a
little bit. There's nervousness on that front, so there's a lot
of paring back of positions."
The 10-year yield hit a high of 1.752%, its highest level in
just over a month.
Benchmark 10-year notes US10YT=RR last fell 12/32 in price
to yield 1.7437%, from 1.702% late on Tuesday.
The European Central Bank's meeting comes ahead of next
week's policy meeting by the U.S. Federal Reserve, which is
still widely expected to cut interest rates even as economic
data showed producer prices unexpectedly rose in August.
Expectations for a 25-basis-point cut by the Fed stand at
88.8%, according to CME's FedWatch, down from 92.3% on Tuesday.
U.S. President Donald Trump pushed the Fed to cut interest
rates to zero or into negative territory in a pair of Twitter
posts on Wednesday. In currencies, the euro weakened to a one-week low against
the dollar ahead of the ECB meeting, while the dollar was on
track for its best day in nearly two weeks against a basket of
major currencies. The dollar index .DXY rose 0.3%, with the euro EUR= down
0.3% to $1.101.
Oil prices slumped more than 2% after a report that Trump
weighed easing sanctions on Iran, which could boost global crude
supply. U.S. crude CLcv1 settled down 2.87$ at $55.75 per barrel
and Brent LCOcv1 settled at $60.81, down 2.52% on the day.
GRAPHIC: U.S. yields rise https://tmsnrt.rs/2A9yEA3
GRAPHIC: Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC: Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
GRAPHIC: MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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