GLOBAL MARKETS-U.S., European shares gain after Trump auto-tariff delay

* Wall Street, European shares rebound after initial falls
* Trump set to delay auto tariffs decision by up to 6 months
* Positive trade sentiment counters weak U.S., China data
* U.S. 2-year Treasury yield hits 15-month low after retail
data
* Oil rises on Middle East tension, shrugs off U.S. crude
build

(Updates with afternoon U.S. trading)
By Lewis Krauskopf
NEW YORK, May 15 (Reuters) - U.S. and European stock indexes
gained on Wednesday after news that U.S. President Donald Trump
planned to delay tariffs on auto imports, offsetting earlier
pressure on equities and government bond yields from weak U.S.
and Chinese economic data.
Trump is expected to delay a decision on tariffs on imported
cars and parts by up to six months, three administration
officials told Reuters. Fears about an escalating
global trade war, particularly following a spike in U.S.-China
tensions, have rattled markets over the past week.
“Europe is on the brink of recession, and auto tariffs would
almost certainly push it into recession," said Oliver Pursche,
chief market strategist at Bruderman Asset Management in New
York. "President Trump announcing that he'd delay auto tariffs
by as many as six months is positive, and stocks are reacting
appropriately to that.”
Meanwhile, U.S. Treasury Secretary Steven Mnuchin said he
will likely travel to Beijing soon to continue negotiations with
Chinese counterparts as the world's two biggest economies try to
salvage talks aimed at ending their months-long trade war.
Major U.S. and European stock indexes moved higher after
falling earlier.
On Wall Street, the Dow Jones Industrial Average .DJI rose
122.85 points, or 0.48%, to 25,654.9, the S&P 500 .SPX gained
18.54 points, or 0.65%, to 2,852.95 and the Nasdaq Composite
.IXIC added 86.37 points, or 1.12%, to 7,820.86.
The pan-European STOXX 600 index .STOXX rose 0.46%.
Europe's auto's and suppliers index .SXAP jumped 2.0%.
Italian stocks .FTMIB were still down 0.1% after the
country's deputy prime minister said Rome was ready to break EU
fiscal rules. MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.56%.
The positive trade developments lifted risk sentiment that
had been dampened earlier in the session by weak economic data.
China reported surprisingly weaker growth in retail sales
and industrial output for April. In the U.S., retail sales
unexpectedly fell in April as households cut back on purchases
of motor vehicles and a range of other goods, while other data
showed a drop in industrial production last month. “The market gave, up until now, the (Trump) administration
the benefit of the doubt in prosecuting the trade war because
the economy was strong, and now all of a sudden the data was
weaker than expected and I think it is causing a little bit of
concern here,” David Joy, chief market strategist at Ameriprise
Financial in Boston, said before news of the auto-tariff delay.
U.S. Treasury yields fell, with the two-year yield hitting
its lowest in 15 months as traders raised bets on a Federal
Reserve interest rate cut after U.S. retail sales missed
expectations. Benchmark 10-year notes US10YT=RR last rose 12/32 in price
to yield 2.3785%, from 2.419% late on Tuesday.
The dollar index .DXY , which measures the greenback
against a basket of six major currencies, rose 0.01%, with the
euro EUR= up 0.02% to $1.1205. Oil futures rose as worries that rising tensions in the
Middle East could hit global supplies overshadowed an unexpected
build in U.S. crude inventories. U.S. crude CLcv1 rose 0.55% to $62.12 per barrel and Brent
LCOcv1 was last at $71.91, up 0.94% on the day.

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