U.S. Markets closed

Wall St. up as near-term rate-hike prospects fade; oil jumps

A street sign for Wall Street hangs in front of the New York Stock Exchange May 8, 2013. REUTERS/Lucas Jackson

By Michael Connor

NEW YORK (Reuters) - Global equity markets rose on Thursday, with Wall Street's S&P 500 index closing at a record high as investors bet that U.S. interest rates won't rise soon, while oil jumped more than 2 percent on the view that a global glut may be starting to ease.

Brent crude topped $66 a barrel.

The dollar slipped and U.S. Treasury yields declined. Trading was muted in many North American markets a day ahead of a speech by Federal Reserve Chair Janet Yellen, who investors watch for indications of how soon the Fed will raise U.S. interest rates from near zero.

Fed officials believe it would be premature to start rate hikes next month, even though most feel the U.S. economy is rebounding from a dismal start to the year, according to minutes from their April policy meeting.

Wall Street's S&P 500 (.SPX) gained 4.97 points, or 0.23 percent, to end at 2,130.82 points, barely beating its previous record close of 2,129.2 from Monday.

The Dow Jones industrial average (.DJI) was essentially flat, ending up 0.34 points at 18,285.74. The Nasdaq Composite (.IXIC) rose 19.05 points, or 0.38 percent, to 5,090.79, just short of its record close of 5,092.08 from April 24.

Equity investors mostly shrugged off weaker-than-expected U.S. manufacturing and other data, including a rise in weekly claims for state unemployment benefits reported by the U.S. Labor Department.

U.S. Treasuries yields declined on the disappointing data, which revived worries among bond investors about the economy and whether the Fed would raise interest rates later this year.

Yields on the 30-year bond fell below 3 percent, while benchmark 10-year Treasuries were up 16/32 in price with a yield of 2.193 percent, down six basis points from Wednesday's close.

"There were fears about a sharp spring recovery, but the data haven't rebounded smartly," said Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, New Jersey.

The dollar index (.DXY) was down 0.14 percent, as the euro rose against the dollar. The euro last traded at $1.1112, a gain of 0.20 percent. Sterling was ahead 0.80 percent against the dollar to $1.5660.

European share indexes closed mostly ahead, recovering from session lows after data pointed to contrasting fortunes in major euro zone economies. German private-sector growth slowed again in May, and France extended its timid recovery.

The pan-European FTSEurofirst 300 index (.FTEU3) ended up 0.4 percent after having traded as much as 0.4 percent lower. France's CAC (.FCHI) was up 0.3 percent.

Euro zone leaders were meeting in Latvia, with Greek premier Alexis Tsipras seeking an outline of a cash-for-reforms deal to stave off a default.

But German Finance Minister Wolfgang Schaeuble told Reuters the Greek government's optimism about clinching a deal in the coming days was not justified.

Oil rose for a second day, with gains supported by fighting in Iraq and the decline in the value of the dollar.

U.S. crude (CLc1) settled up $1.74, or nearly 3 percent, at $60.72 a barrel. Brent (LCOc1), the more widely used benchmark, settled at $66.54, up $1.51, or 2.3 percent.

(Additional Reporting by Richard Leong and Karen Brettell in New York; Editing by Meredith Mazzilli and Bernadette Baum)