GLOBAL MARKETS-Wall St stocks climb, dollar drops on rate-cut optimism

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates after U.S. market open, adds commentary, changes
byline, previous dateline LONDON)
By Sinéad Carew
NEW YORK, July 12 (Reuters) - U.S. stocks edged higher and
the dollar fell as hopes rose for an imminent interest-rate cut,
while oil futures were little changed as supply worries
triggered by a tropical storm were offset by signs of a global
surplus for several months.
Treasury yields rose modestly, largely unmoved by
stronger-than-expected producer price data as market
expectations of a U.S. interest rate cut in July held firm after
two days of testimony from Federal Reserve Chair Jerome Powell.
Wall Street's benchmark, the S&P 500 .SPX , and the Dow
Jones Industrial Average rose slightly after hitting records in
the previous day's session.
"We're coasting along with the wind at our back right now
after Powell's testimony this week which points toward a rate
cut in July," said Michael Antonelli, market strategist at
Robert W. Baird in Milwaukee.
The Dow Jones Industrial Average .DJI rose 142.84 points,
or 0.53%, to 27,230.92, the S&P 500 .SPX gained 6.55 points,
or 0.22%, to 3,006.46 and the Nasdaq Composite .IXIC added
29.14 points, or 0.36%, to 8,225.18.
All three stock indexes were on track for their second
weekly advance in a row ahead of the start of the second-quarter
corporate earnings season. Analysts are forecasting a decline in
S&P 500 earnings per share of 0.4% for the quarter, according to
I/B/E/S data from Refinitiv.
"Most of the gains this year have been from multiple
expansion. Earnings needs to start doing its part. Otherwise you
risk people looking at multiple expansion saying this looks like
a top," said Antonelli.
The pan-European STOXX 600 index .STOXX rose 0.01% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.13%.
U.S. producer prices rose slightly in June as the cost of
energy and other goods dropped for a second straight month,
beating economists' expectations that prices would be unchanged.
The Labor Department report comes on the heels of strong
consumer price data published on Thursday, suggesting overall
inflation could continue to rise moderately despite the gains in
consumer prices. But "one individual dataset will not sway or set" the Fed's
decision on interest rates, said Michael Lorizio, senior fixed
income trader at Manulife Investment Management.
In Treasuries, benchmark 10-year notes US10YT=RR last fell
2/32 in price to yield 2.1272%, from 2.12% late on Thursday.
In currencies, continued bets on a U.S. rate cut also sent
the dollar lower for the third day in a row. The
dollar index .DXY , tracking it against six major peers, fell
0.13%, with the euro EUR= up 0.04% to $1.1257.
The Japanese yen strengthened 0.46% versus the greenback at
108.02 per dollar.
Oil futures were little changed as Gulf of Mexico supply
disruptions caused by a tropical storm supported prices, while
concerns over a global crude oil surplus in the months ahead
limited gains. O/R
U.S. crude CLcv1 rose 0.1% to $60.26 per barrel.
Gold prices inched higher on Friday as investors shrugged
off concerns that stronger-than-expected consumer inflation in
the United States could influence the U.S. central bank's
decision on aggressive monetary policy easing. GOL/
Spot gold XAU= added 0.4% to $1,408.61 an ounce.

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(Editing by Bernadette Baum)