GLOBAL MARKETS-Stocks, U.S. yields rise after strong economic data

* U.S. housing starts rise, jobless claims fall more than
expected
* Trade in focus after latest U.S. sanctions on Huawei
* Trade tensions support dollar, euro dips before elections
* Oil prices rise on Middle East tensions

(Updates with opening of U.S. markets; changes dateline,
previous LONDON)
By Lewis Krauskopf
NEW YORK, May 16 (Reuters) - World stock markets and U.S.
benchmark bond yields gained on Thursday following strong
economic data as investors assessed the latest developments in
global trade relations.
A spike in U.S.-China tensions over import tariffs has
convulsed markets recently as investors seek to parse statements
from government leaders to gauge the direction of talks.
News that President Donald Trump is expected to delay auto
tariffs appeared to improve the trade tone on Wednesday, but
later in the day the Trump administration hit Chinese telecoms
giant Huawei with severe sanctions. "The market is really having a hard time pricing in this
trade war," said Mark Hackett, chief of investment research at
Nationwide. "There was a belief earlier in the week that it was
going to be catastrophic and we have gained back all of that
decline. In my opinion, it is probably a little too optimistic
to declare victory."
On Wall Street, the Dow Jones Industrial Average .DJI rose
273.04 points, or 1.06%, to 25,921.06, the S&P 500 .SPX gained
37.33 points, or 1.31%, to 2,888.29 and the Nasdaq Composite
.IXIC added 107.94 points, or 1.38%, to 7,930.08.
Shares of Cisco Systems CSCO.O and Walmart WMT.N both
gave boosts to the S&P 500 and the Dow after their respective
earnings reports. Cisco shares rose 6.4% and Walmart rose 3.3%.
The Philadelphia semiconductor index .SOX fell 0.9%
following the Huawei news.
The pan-European STOXX 600 index .STOXX rose 1.14%.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.82%.
U.S. homebuilding increased more than expected in April and
activity in the prior month was stronger than initially thought.
In a separate report, the number of Americans filing
applications for unemployment benefits fell more than expected
last week. U.S. Treasury yields rose following the strong economic
data. Benchmark 10-year notes US10YT=RR last fell 9/32 in price
to yield 2.4104%, from 2.379% late on Wednesday.
The U.S. dollar rose against a basket of currencies as
investors focused on trade war tensions, while the euro was hurt
by concerns about next week's European parliamentary elections.
The dollar index .DXY rose 0.25%, with the euro EUR=
down 0.23% to $1.1174.
"The risk is that we get more populist comments, such as
from the Italian Deputy PM," said Credit Agricole FX strategist
Manuel Olivieri. "Italy remains one of the factors keeping euro
downside risks high."
Oil prices rose for a third day running as fears of supply
disruption amid heightened tensions in the Middle East
overshadowed swelling U.S. crude inventories. U.S. crude CLcv1 rose 2.14% to $63.35 per barrel and Brent
LCOcv1 was last at $73.13, up 1.89% on the day.

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