Broadcom named strategic vendor for Walmart virtualization solutions
* Shares claw higher, dollar steady while yield curve
steepens
* U.S. data adds to outlook for Fed rate cut
(Updates prices to late afternoon; adds commentary)
By Sinéad Carew
NEW YORK, June 13 (Reuters) - Oil futures rose on Thursday
after attacks on two tankers off the coast of Iran, while the
U.S. Treasury yield curve steepened and stocks rose following
economic data that was seen as strengthening the case for the
Federal Reserve to cut interest rates this year.
Wall Street's major stock indexes climbed after falling for
two days as investors regained their appetite for risk assets.
The number of Americans applying for unemployment benefits
unexpectedly rose last week, potentially adding to concerns
about the U.S. labor market after May job growth slowed. Other
data showed import prices fell by the most in five months in May
in the latest indication of muted inflation pressures, adding to
expectations the Fed will cut rates this year. "There are a lot of cross currents but in general a grind
higher," said Joseph Quinlan, head of chief investment office
market strategy for Merrill and Bank of America Private Bank in
New York, citing everything from the Fed rate cut expectations
to a lack of new headlines on the U.S.-China trade war.
"On days when there's no new news from the U.S. and China
that's a positive," he said. "The Middle East problems haven't
caused a flight to safety. That's a positive sign."
The S&P pared gains slightly but was still positive after
U.S. Secretary of State Mike Pompeo said, without offering
concrete evidence, the United States believes Iran is
responsible for tanker attacks in the Gulf of Oman. The Dow Jones Industrial Average .DJI rose 68.59 points,
or 0.26%, to 26,073.42, the S&P 500 .SPX gained 8.17 points,
or 0.28%, to 2,888.01, and the Nasdaq Composite .IXIC added
34.43 points, or 0.44%, to 7,827.14.
The pan-European STOXX 600 index .STOXX rose 0.16% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.01%.
After falling hard on Wednesday, oil futures rebounded
sharply on the news of the tanker attacks in the Gulf of Oman
near Iran and the Strait of Hormuz, a key passage for seaborne
oil cargoes. U.S. crude CLcv1 rose 2.11% to $52.22 per barrel,
recouping some of the previous day's 4% drop. Brent LCOcv1 was
up 2.7% at $61.57.
YIELD CURVE STEEPENS
Increased expectations of Fed rate cuts pulled short-dated
U.S. Treasury yields lower on Thursday, steepening the yield
curve ahead of Friday's retail sales data and the Fed's meeting
next week. Benchmark 10-year notes US10YT=RR last rose 11/32 in price
to yield 2.091%, from 2.127% late on Wednesday.
In currencies, the U.S. dollar was little changed against
the euro as investors were slow to take large positions before
the Fed meeting and the G20 summit later in June when U.S. and
China leaders are expected to discuss trade. The dollar index .DXY , which tracks the greenback against
six major currencies, rose 0.01%, with the euro EUR= down
0.09% to $1.1277.
The Japanese yen strengthened 0.16% versus the greenback, to
108.34 per dollar, while sterling GBP= was last trading at
$1.2681, down 0.04% on the day.
Gold prices edged higher on expectations for a U.S. rate cut
after the soft inflation data, although the uptick in equities
capped gains. Spot gold XAU= added 0.6% to $1,340.78 an ounce.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Fed Funds rate projections https://tmsnrt.rs/2XgZ7Jj
Position of evacuated tankers in Gulf of Oman https://tmsnrt.rs/2X6nIQF
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>