* Data heightens expectations for Fed rate hike in March
* Financials lift Wall St to another record
* Dollar dips after touching one-month high
(Updates with close of European markets)
By Chuck Mikolajczak
NEW YORK, Feb 15 Stocks on major world markets
climbed on Wednesday and U.S. Treasury yields rose after a batch
of U.S. economic data and recent commentary by Federal Reserve
officials increased expectations of an interest rate hike in
U.S. retail sales rose more than expected in January, while
other data showed consumer prices recorded their biggest
increase in nearly four years last month and manufacturing
output steadily rising.
The reports come on the back of comments from U.S. Fed Chair
Janet Yellen on Tuesday, which she repeated to the House of
Representatives on Wednesday, that the central bank would
probably need to raise rates at one of the upcoming meetings.
The economic data and Yellen's comments heightened
expectations of a March interest rate hike, with U.S. short-term
interest rates futures implying a 27-percent chance of a 25
basis point rise at its March meeting.
"She (Yellen) has made it clear that she wants to raise
rates," said Neil Massa, senior equity trader at Manulife Asset
Management in Boston.
"Before she spoke yesterday, the March meeting wasn't in
play, but now that is definitely on the table and I think the
numbers today bode well for her to do that."
In addition, Boston Fed President Eric Rosengren, a
long-time dove who last year switched tack and began pushing for
tighter monetary policy said the central bank may need to raise
interest rates a bit more aggressively than the thrice-per-year
pace forecast by policymakers.
Goldman Sachs raised its expectations that the Federal
Reserve will hike interest rates in the first half of 2017 and
J.P. Morgan brought forward its forecast of the next rate
increase to May.
The prospect of higher rates pushed U.S. financial stocks
0.8 percent higher on Wall Street for their fifth
straight day and lifted the benchmark S&P 500 index to
The Dow Jones Industrial Average rose 92.92 points,
or 0.45 percent, to 20,597.33, the S&P 500 gained 8.33
points, or 0.36 percent, to 2,345.91 and the Nasdaq Composite
added 25.00 points, or 0.43 percent, to 5,807.58.
MSCI's benchmark global equity index rose 0.57 percent to
443.64 points, just below its intraday record of
443.98 set in April 2015.
Europe's index of leading 300 stocks closed up 0.4
percent to 1,465.05, its highest since December 2015, buoyed by
Benchmark U.S. Treasury yields rose to a
two-and-a-half week high of 2.524 percent after the data and
were last down 11/32 in price to yield 2.5076 percent.
The U.S. dollar reversed course after touching a
one-month high in the wake of the U.S. data and was last down
0.06 percent against a basket of major currencies. The greenback
had advanced for eleven straight session before weakening on
U.S. crude edged down 0.04 percent at $53.18 and
Brent shed 0.23 percent to $55.84 a barrel as record
high U.S. crude and gasoline inventories fed concerns about a
(Reporting by Chuck Mikolajczak; editing by Clive McKeef and