* Financials lead Wall Street higher
* European stocks touch highest level since Dec. 2015
* U.S. Treasury yields fall ahead of Yellen testimony
(Updates with U.S. market open; changes byline, dateline)
By Chuck Mikolajczak
NEW YORK, Feb 13 A gauge of global equity
markets advanced on Monday and bond yields rose, lifted by a
reemergence of assets likely to benefit from reflationary
policies that are expected to be implemented by U.S. President
Financials and banks in particular led equities on
Wall Street higher as investors bet Trump's tax reform plans and
softer regulatory environment will boost economic growth and
"It's interesting and it's very important that the
financials are on the leading edge of the reflation trade," said
Peter Kenny, senior market strategist at Global Markets Advisory
Group, in New York.
"If you look at the financials, the primary reason we are
seeing outperformance on their part, that speaks directly to the
Trump reflation trade."
Investors were also encouraged by the two-day U.S.-Japan
summit held over the weekend apparently having ended smoothly
without President Donald Trump talking tough on trade, currency
or security issues.
The Dow Jones Industrial Average rose 125.57 points,
or 0.62 percent, to 20,394.94, the S&P 500 gained 10.34
points, or 0.45 percent, to 2,326.44 and the Nasdaq Composite
added 28.61 points, or 0.5 percent, to 5,762.73.
MSCI's all-country world index advanced 0.46
percent and was on track for its fourth straight advance.
Europe's broad FTSEurofirst 300 index gained 0.9
percent after hitting its highest level since December 2015.
U.S. Treasury yields rose as investors looked ahead to
testimony by Federal Reserve Chair Janet Yellen on Tuesday and
Wednesday when the Fed Chair gives her semiannual Humphrey
Hawkins testimony before lawmakers in Washington.
Benchmark 10-year notes US10YT=RR were last down 10/32 in
price to yield 2.4448 percent, up from 2.41 percent late on
The dollar also moved to a near three-week high
against a basket of major currencies on expectations the
reflationary policies would stoke economic growth and the
possibility the Fed could be more aggressive in hiking interest
Comments from Trump on Thursday that he plans to announce
what he said would be the most ambitious tax reform plan since
the Reagan era in the next few weeks rekindled hopes for big tax
In commodities, copper hit its highest levels since
May 2015 after shipments were shut off from the world's two
biggest copper mines - due to a strike in Chile and an export's
ban by Indonesia.
It last traded at $6,102 per tonne, up 0.2 percent on the
day after climbing as high as $6,204. On Friday it jumped more
than 4 percent, its biggest one-day rise in almost four years.
Oil prices dipped slightly after strong gains on Friday in
the wake of an OPEC report showing high compliance by members in
a production cut while signs of rising U.S. crude output
continued to weigh on prices.
International benchmark Brent crude futures fell 1.9
percent to $56.65 per barrel and U.S. crude lost
1.6 percent to $52.98.
(Editing by Bernadette Baum)