* U.S. stocks gain after budget talks held at White House
* World equity markets head for second weekly fall
* Brent crude above $108 a barrel on Middle East tension
* U.S. dollar extends gains versus yen, hits session high
By Herbert Lash
NEW YORK, Nov 16 U.S. stock markets turned
higher at midsession on Friday after legislators suggested
tentative progress had been made in talks at the White House on
avoiding tax hikes and spending cuts that would hurt the economy
U.S. stocks recovered from losses after Senate and House
leaders from both parties said in comments that they held
But shares on major markets were still headed toward a
second consecutive weekly loss as the collective worry about the
U.S. government's fiscal problems and weak global economic
growth weighed on sentiment.
"This is the first time we've had one iota of anything
constructive being done," said Todd Schoenberger, managing
principal at the BlackBay Group in New York.
"That's very positive, but you can be flexible and still
have us go over the cliff. Wall Street traders remain very
nervous and need something concrete to get done," he said.
President Barack Obama met with top U.S. lawmakers on Friday
to discuss avoiding the so-called "fiscal cliff." Investors have
been concerned that if no deal were reached to modify automatic
spending cuts and tax hikes, the U.S. economy could slip into
recession. The S&P 500 has dropped 4.3 percent over the past two
weeks, in part due to these worries.
Benchmark Brent crude oil prices rose toward $109 a barrel
as a showdown between Israel and the Palestinians in Gaza stoked
worries about supply. Investors were concerned that Arab
producers may be drawn into any potential conflict, which could
impact supply lines.
The Dow Jones industrial average was up 27.42 points,
or 0.22 percent, at 12,569.80. The Standard & Poor's 500 Index
was up 3.19 points, or 0.24 percent, at 1,356.52. The
Nasdaq Composite Index was up 4.65 points, or 0.16
percent, at 2,841.58.
The MSCI world equity index was down 0.2
percent at 317.17, and has lost almost 2 percent this week.
FTSEurofirst 300 index of top companies shed 1.0
percent to 1,067.45, on course for its worst week since late
The Japanese yen steadied a bit after a two-day pummeling
against the U.S. dollar but remained on track for its worst
weekly loss since late June on expectations of aggressive
monetary easing from the Bank of Japan.
"The basic driver is still the interest rate differential
between the dollar and yen, which is very narrow, and we have to
wait for what happens after the (Japanese) elections," said
Marcus Hettinger, global FX strategist at Credit Suisse in
The U.S. dollar was up 0.3 percent at 81.38 yen. The
euro was down 0.5 percent against the dollar at $1.2704.
Brent crude rose 45 cents to $108.46 a barrel. U.S.
oil gained 91 cents to $86.36.
U.S. Treasury debt prices rose slightly, with yields near
two-month lows, on investor skepticism that budget talks aimed
at preventing an automatic fiscal tightening will be immediately
The benchmark 10-year U.S. Treasury note was up
3/32 in price to yield 1.58 percent.