* All three major U.S. stock indexes gain ground
* U.S. Treasury yield curve steepens as long-dated yields
* European, emerging stock markets rally
* Pound rises as British parliament moves to block no-deal
Brexit
* Hong Kong scraps extradition bill, boosting sentiment
(Updates to market close)
By Stephen Culp
NEW YORK, Sept 4 (Reuters) - Stocks rebounded worldwide on
Wednesday, and the U.S. Treasury yield curve steepened as upbeat
geopolitical news and positive economic data from China helped
revive risk appetite.
A parliamentary vote in Britain put the brakes on the
nation's no-deal exit from the European Union, Hong Kong
withdrew the contentious extradition bill that sparked recent
protests and political turmoil in Italy appeared to be easing
with the formation of a new coalition cabinet, all of which
brought buyers back to equities markets.
China's services sector expanded in August at its fastest
pace in three months as a jump in new orders prompted the
biggest hiring increase in over a year, according to the
Caixin/Markit services purchasing managers index (PMI).
"It looks like the situation in Europe might improve
regarding Brexit, which is really an economic disaster," said
Jim Bell, president, chief investment officer at Bell Investment
Advisors in Oakland, California. "It's a refreshing development
especially after September got off to a pretty grim start."
"The situation it Italy also looks to be positive," Bell
added. "There seems to be a synchronized global uptick in
confidence."
The U.S. trade deficit shrank in July, according to the
Commerce Department, but bilateral gaps in goods trade with key
partners widened. The deficit with China grew by 9.4% as the
bruising Sino-U.S. trade war raged on and the deficit with the
European Union hit a record high.
The Dow Jones Industrial Average .DJI rose 237.45 points,
or 0.91%, to 26,355.47, the S&P 500 .SPX gained 31.51 points,
or 1.08%, to 2,937.78 and the Nasdaq Composite .IXIC added
102.72 points, or 1.3%, to 7,976.88.
The political developments in Europe and Hong Kong helped
fuel a rally in European stocks, sending them to one-month
highs. The pan-European STOXX 600 index .STOXX rose 0.89% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
1.18%.
Emerging market stocks rose 1.86%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.8%
higher, while Japan's Nikkei .N225 rose 0.12%.
The U.S. Treasury yield curve was at its steepest in two
weeks as two-year yields hit their lowest since September 2017
and improving risk sentiment sent longer-dated yields higher.
"If the yield curve gets itself back to its more common
upward slope, that's a response to renewed confidence globally
that things could get better," Bell said.
Benchmark 10-year notes US10YT=RR last rose 2/32 in price
to yield 1.4606%, from 1.466% late Tuesday.
The 30-year bond US30YT=RR last fell 9/32 in price to
yield 1.9619%, from 1.95% late Tuesday.
Fresh doubts about the scale of the European Central Bank's
stimulus caused the euro to rebound, while the dollar continued
its retreat from a more than two-year high against a basket of
major world currencies. The pound sterling recovered on efforts
to avoid a no-deal Brexit. The dollar index .DXY fell 0.56%, with the euro EUR= up
0.53% to $1.103.
The Japanese yen weakened 0.38% versus the greenback at
106.36 per dollar, while sterling GBP= was last trading at
$1.222, up 1.13% on the day.
Oil prices rose with the tide, with WTI crude on track for
its biggest daily percentage increase since June 10, boosted by
easing geopolitical tensions and the positive news about China's
services sector. U.S. crude futures settled up 4.3% at $56.26 per barrel,
while Brent crude futures settled at $60.70 per barrel, a 4.2%
increase.
Gold inched higher amid remaining economic concerns in the
shadow of the U.S.-China trade war, but the precious metal still
hovered below its six-year peak. Spot gold XAU= added 0.5% to $1,553.95 an ounce.
Copper CMCU3 rose 2.51% to $5,751.00 a tonne.
Three-month aluminum on the London Metal Exchange CMAL3
rose 0.94% to $1,769.50 a tonne.
GRAPHIC-Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
US STOCKS-Strong Chinese data, easing geopolitical worries push
Wall St higher for European stocks as political tensions ease
steepens as risk appetite drives long-dated
yields higher political risk lift German yields; Italy rally continues
prices rise over 4% on positive economic data from China
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