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GLOBAL MARKETS-Shares gain on Yellen comments, reduced bank fears

Published 2016-02-10, 11:47 a/m
© Reuters.  GLOBAL MARKETS-Shares gain on Yellen comments, reduced bank fears
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* Yellen says Fed can pursue "gradual" policy adjustments
* U.S., European financial shares gain
* Oil prices rise on optimism over producers tackling supply
glut
* Dollar index climbs from four-month lows
* Treasury yields edge higher

(Updates to open of U.S. trading, changes byline, dateline; pvs
LONDON)
By Sam Forgione
NEW YORK, Feb 10 (Reuters) - Stock indexes worldwide
rebounded on Wednesday after concerns eased about the banking
sector and Federal Reserve Chair Janet Yellen said the U.S.
central bank has plenty of flexibility to adjust monetary policy
if needed.
U.S. financial stocks, which had been hit in recent days on
worries over the impact of low interest rates on banks'
profitability and capital strength, rose after Yellen's comments
that conditions in the United States would allow the Fed to
proceed with "gradual" adjustments to policy.
Yellen's testimony to Congress boosted sentiment.
Expectations of a 2016 rate rise have all but vanished, partly
on weak U.S. economic data, even though the Fed's forecasts
suggest members see more rate hikes during the year.
"What Yellen said has been taken positively," said Richard
Sichel, chief investment officer of Philadelphia Trust Co in
Philadelphia. "Stocks in general are cheaper now than they were
three days ago or three months ago, so there's an opportunity to
step in."
The S&P financial index rose 0.4 percent. European shares
snapped a seven-day losing streak, bolstered by solid earnings
and a recovery in Deutsche Bank DBKGn.DE from 30-year lows.
The euro zone's banking index .SX7E was last up 7 percent.
It is still facing its seventh consecutive week of declines, the
longest losing streak since 1998.
MSCI's all-country world equity index .MIWD00000PUS , which
tracks shares in 45 nations, was last up 2.24 points, or 0.62
percent, at 360.67.
The Dow Jones industrial average .DJI was down 6.92
points, or 0.04 percent, to 16,007.46, the S&P 500 .SPX rose
7.81 points, or 0.42 percent, to 1,860.02 and the Nasdaq
Composite .IXIC jumped 45.21 points, or 1.06 percent, to
4,313.97.
Europe's broad FTSEurofirst 300 index .FTEU3 was last up
1.8 percent, at 1,242.06. The index fell 1.6 percent and hit its
lowest point since September 2013 on Tuesday.
Brent crude prices rose after one of the biggest declines
since the 2008 financial crisis on Tuesday.
Iran's oil minister said Tehran was ready to negotiate with
Saudi Arabia, suggesting the possibility of major producers
cooperating to tackle a supply glut.
Brent crude LCOc1 was last up $0.39, or up 1.29 percent,
at $30.71 a barrel. U.S. crude CLc1 was last down $0.41, or
down 1.47 percent, at $27.53 per barrel.
The dollar climbed from nearly four-month lows hit Tuesday
against a basket of major currencies after Yellen's prepared
remarks. The dollar index .DXY , which tracks the greenback
versus a basket of six currencies, rose 0.247 points or 0.26
percent, to 96.318.
"Ms. Yellen seems to be maintaining her faith in the outlook
of the U.S. economy and still anticipates to raise rates. That's
what at the end of the day is supportive of the U.S. currency,"
said Joe Manimbo, senior market analyst at Western Union
Business Solutions in Washington.
The gains in U.S. shares weighed on demand for safe-haven
U.S. Treasuries. Benchmark 10-year Treasury yields were last
down 8/32 in price to yield 1.7565 percent, off a one-year low
of 1.682 percent touched Wednesday.
Spot gold prices XAU= rose $5 or 0.42 percent, to
$1,193.46 an ounce.

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INSTANT VIEW 4-Yellen nods to uncertain market, notes US
strength
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