* ECB announces fresh stimulus measures
* Euro STOXX 600 hits highest level since July 25
* MSCI's world equity index touches highest since July 31
* Trade headlines whipsaw markets
(Updates with open of U.S. markets, changes dateline; previous
LONDON)
By Chuck Mikolajczak
NEW YORK, Sept 12 (Reuters) - A gauge of global stock
markets touched its highest since late July on Thursday after
fresh hints of progress in the U.S.-China trade dispute, sending
bond yields off lows hit earlier in the wake of the European
Central Bank's new stimulus measures.
On Wall Street, major equity indexes climbed to session
highs after a Bloomberg report said Trump administration
officials have considered offering a limited trade deal to China
that would delay or possibly roll back some tariffs, in exchange
for assurances on intellectual property and agricultural
purchases.
The report comes on the heels of recent signs of a thaw in
negotiations between the world's two largest economies,
including the announcement by China of some tariff exemptions on
Wednesday.
"If that is the case, they could certainly be moving on
trade and that would be a positive, absolutely would be a
positive but I still think a lot of that is already priced into
the market," said Ken Polcari, managing principal at Butcher
Joseph Asset Management in New York.
Polcari noted the recent statements on trade between the two
countries were "all little steps towards coming up with
something, that is why the headline is not necessarily so
surprising because you could almost feel like they wanted to say
something."
Trading was volatile, as stocks quickly pared gains after a
CNBC reported a White House official denied the U.S. was
considering such a deal. The Dow Jones Industrial Average .DJI rose 76.5 points, or
0.28%, to 27,213.54, the S&P 500 .SPX gained 10.59 points, or
0.35%, to 3,011.52 and the Nasdaq Composite .IXIC added 42.06
points, or 0.51%, to 8,211.74.
Stocks in Europe were whipsawed by the trade reports as well
after climbing on the earlier ECB policy statement, with the
broad STOXX 600 index rising as much as 0.75%.
The European Central Bank promised an indefinite supply of
fresh asset purchases and cut interest rates deeper into
negative territory in an effort to buttress the euro zone
economy. The pan-European STOXX 600 index .STOXX rose 0.18% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.41%.
Euro zone bond yields fell and the euro weakened following
the ECB announcement but both eventually reversed course as the
stimulus measures failed to live up to dovish market
expectations as well as a reaction to the trade headlines.
After falling as low as a negative 0.124%, 30-year German
yields DE30YT=RR were last at a negative 0.022% after moving
into positive territory earlier this week.
The dollar index .DXY , tracking the unit against six major
currencies, fell 0.18%, with the euro EUR= up 0.3% to $1.1042.
Trade optimism also pushed yields on U.S. Treasuries higher
after earlier declines that were in sync with European bonds.
Benchmark 10-year notes US10YT=RR last fell 6/32 in price
to yield 1.7524%, from 1.733% late on Wednesday.
With the ECB decision in the rear view, attention now turns
to the U.S. Federal Reserve, which is widely expected to cut
rates next Wednesday.
HIGHLIGHTS-Draghi comments at ECB press conference
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>