* Wall Street down on weakness in bank stocks
* U.S. Treasury debt yields drop for third straight session
* Chinese numbers add to upbeat factory data in Europe, U.S.
* Dollar falls after unimpressive U.S. labor data, yuan
* Oil rebounds as Saudi output cuts offset U.S. products
(Updates to afternoon U.S. trading, adds settled oil prices)
By Saqib Iqbal Ahmed
NEW YORK, Jan 5 World stocks shrugged off
weakness on Wall Street to cling to gains after hitting their
highest level since mid-2015 on Thursday, bolstered by strong
Chinese data that added to optimism about global growth and
The dollar slipped against a basket of major currencies
after U.S. inflation and unemployment data failed to reverse a
downtrend that followed some of the biggest gains on record for
China's yuan. U.S. Treasury debt yields slipped as investors
grew uncertain about the incoming Trump administration.
MSCI's world index, which tracks shares in
46 countries, was up 0.47 percent. The index has been riding a
wave of upbeat factory and service sector surveys out of the
United States, Europe and Asia this week.
Growth in China's services sector accelerated to a 17-month
high in December, a private sector survey showed.
The index, however, got no boost from Wall Street as
weakness in financials weighed.
The S&P 500 financial index was down 1.3 percent -
set for its worst day since late November - due to declines in
JPMorgan, Wells Fargo and Bank of America
"Financials coming down probably had something to do with
bond yields coming down. A lot of the post-election rally was
predicated on yields moving higher," said Jimmy Chang, chief
investment strategist at Rockefeller & Co.
Department stores Macy's dropped 14 percent while
Kohl's slumped 19 percent after the companies said their
holiday sales fell more than expected.
Adding to the downbeat sentiment was a report by a payrolls
processor which showed that U.S. private employers added
fewer-than-expected jobs in December even as the U.S. labor
market remained solid.
Thursday's ADP report precedes Friday's nonfarm payrolls
data, which includes hiring in both private and public sectors.
"Overall it looks like investors will be in a wait-and-see
mode ahead of the Labor Department report tomorrow," said Aaron
Clark, portfolio manager at GW&K Investment Management.
The Dow Jones Industrial Average fell 62.24 points,
or 0.31 percent, to 19,879.92, the S&P 500 lost 4.22
points, or 0.19 percent, to 2,266.53 and the Nasdaq Composite
added 6.70 points, or 0.12 percent, to 5,483.71.
Europe's broad FTSEurofirst 300 index closed up
0.12 percent at 1,445.57.
U.S. Treasury debt yields fell for a third straight session
as investors grew uncertain about the incoming Trump
administration and waited for more clarity about its policies
before taking more positions.
Buying in Treasuries also accelerated after the
disappointing private sector payrolls data.
The U.S. 10-year note was up 23/32 in price to
yield 2.368 percent, compared with 2.452 percent late on
The dollar slipped to a 3-week low against a basket of
currencies. China stepped into both its onshore and offshore
yuan markets to shore up the faltering yuan, sparking
speculation that it wants a firm grip on the currency ahead of
Donald Trump's inauguration on Jan. 20.
"All we're seeing is a continuation of the overnight move,
which is dollar weakness," said Chapdelaine Foreign Exchange
Managing Director Douglas Borthwick.
The dollar index, which measures the greenback
against a basket of six major rivals, was down 1.14 percent to
The dollar's retreat helped push gold to its highest in four
weeks. Spot gold rose 1.48 percent to $1,180.67 an ounce.
Oil prices rose in a choppy session, lifted by news that
Saudi Arabia had cut production to meet OPEC's agreement to cut
output. Prices had fallen earlier on data showing a surprisingly
large increase in U.S. gasoline and distillate inventories.
Brent crude settled up 43 cents, or 0.76 percent, at
$56.89 a barrel, and U.S. crude settled up 50 cents, or
0.94 percent, at $53.76.
(Reporting by Saqib Iqbal Ahmed; Additional reporting by Dion
Rabouin in New York and Yashaswini Swamynathan in Bengaluru;
Editing by Nick Zieminski)