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GLOBAL MARKETS-U.S. stocks, debt yields climb on sturdy U.S. GDP data

Published 2016-10-28, 12:17 p/m
© Reuters.  GLOBAL MARKETS-U.S. stocks, debt yields climb on sturdy U.S. GDP data
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* Bond yields climb, though gains less steep

* Wall Street rises broadly despite healthcare losses

* US GDP grows faster than expected; personal consumption slows

* Oil falls on doubts about OPEC's planned output cut (Adds U.S. markets open; changes dateline to New York; updates throughout)

By Hilary Russ

NEW YORK, Oct 28 (Reuters) - U.S. stocks and government debt yields climbed on Friday, cheered by stronger-than-expected growth in the world's biggest economy that boosted bets on an imminent U.S. rate increase, while oil prices fell amid a persisting global glut.

On Wall Street, stock indexes were higher around midday, with Chevron (NYSE:CVX) CVX.N shares rising 3.82 percent after beating quarterly profit expectations.

Healthcare, which had buoyed the benchmark S&P 500 index in previous sessions, was the only negative sector due to results from Amgen AMGN.O and AbbVie ABBV.N . estimate of U.S. second-quarter gross domestic product showed annualized economic growth of 2.9 percent, the fastest rate in two years. However, the boost came largely from a recovery in inventories and a jump in agricultural exports after poor soy harvests in Argentina and Brazil this year benefited sales by American exporters.

Meanwhile, business investment in equipment contracted for a fourth straight quarter and personal consumption growth slowed to 2.1 percent from 4.3 percent. Dow Jones industrial average .DJI rose 52.6 points, or 0.29 percent, to 18,222.28, the S&P 500 .SPX gained 4.75 points, or 0.22 percent, to 2,137.79 and the Nasdaq Composite .IXIC added 7.41 points, or 0.14 percent, to 5,223.38.

Europe's index of leading 300 shares .FTEU3 was last down 0.35 percent; Germany's DAX slipped by 0.15 percent .GDAXI and the STOXX 600 .STOXX fell 0.32 percent.

MSCI's global stock index was 0.12 percent higher .MIWD00000PUS . Its broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.32 percent, pressured by the prospect of easy money flows being crimped should the U.S. Federal Reserve tighten policy.

In Japan, the weak yen helped to lift the Nikkei 225 index .N225 by 0.6 percent for a weekly rise of 1.5 percent.

YIELDS CLIMB

In a week marked by deep slides in prices of U.S. and European debt, the benchmark 10-year Treasury yield US10YT=RR climbed to a five-month high on Friday just below 1.88 percent, helped by surging British gilt and German bund yields DE10YT=TWEB .

The 10-year Treasury notes were last at 1.86 percent.

Bond yields have risen recently amid concerns the ultra-easy policies of major central banks could have their limits and may not be continued indefinitely.

The robust U.S. GDP data for the third quarter helped pushed Treasury yields higher, with the rates futures markets now pricing in a more than 80 percent chance the Federal Reserve would tighten rates at its December policy meeting.

Deutsche Bank's John Reid said bond markets were living a "nightmare" moment, Rabobank analysts deemed the recent sell-off a "bloodbath" and Bank of America Merrill Lynch (NYSE:BAC) warned of an "angry rise" in yields in the weeks ahead.

Germany's 10-year bund yield earlier rose to 0.219 percent, its highest since early May. It later reversed course on Friday, with prices rising and the yield falling to 0.17 percent.

The U.S. dollar reversed losses against the yen, last up 0.11 percent at 105.38 JPY= , but it was still off the three-month high it touched on Friday of 105.50.

The dollar index .DXY , which measures the greenback against a basket of six major currencies, was last down 0.18 percent at 98.706.

Oil prices fell below $50 a barrel and were set for their biggest weekly losses in six weeks on investor doubts over OPEC's planned output cut and ahead of U.S. rig count data that has steadily increased in the last few months. crude LCOc1 was down 0.42 percent, or 21 cents, at $50.26 a barrel and U.S. crude was 0.44 percent, or 22 cents, lower at $49.51 CLc1 .

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https://t.co/YqIYLIbInP Chinese A-shares vs developed and emerging stocks

http://link.reuters.com/rac25w

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