NEW YORK (Reuters) - Stock prices around the world rose on Tuesday following upbeat U.S. growth data and strength in U.S. healthcare shares, while oil prices tumbled to the weakest level in over a week on doubts OPEC could reach an accord to reduce output.
The dollar fell against a basket of currencies on profit-taking. The dollar index had hit a near 14-year peak last week on expectations a Trump administration would result in tax cuts and a surge in federal spending to bolster the U.S. economy.
“Optimism surrounding potential fiscal stimulus and some targeted deregulation next year have lifted U.S. equity prices in recent weeks,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“Couple that with an increasingly enthusiastic consumer supported by stronger wage gains, and the economy appears well-positioned to remain on a growth path heading into 2017.”
Concerns about rising government borrowing to finance fiscal stimuli, together with upbeat U.S. economic data, spurred early selling in U.S. Treasuries and other core government bonds before month-end related buying emerged, pushing their yields lower.
Gold prices fell on growing expectations of stronger global growth led by the United States and the Federal Reserve raising interest rates in response.
The Dow Jones industrial average .DJI ended up 23.7 points, or 0.12 percent, to 19,121.6, the S&P 500 .SPX finished 2.94 points, or 0.13 percent, higher at 2,204.66 and the Nasdaq Composite .IXIC closed up 11.11 points, or 0.21 percent, to 5,379.92.
Nasdaq earlier hit a record intraday high at 5,403.86.
The outlook for U.S. stocks improved after data showed the U.S. economy grew 3.2 percent in the third quarter, faster than initially thought, due to strong consumer spending and a surge in soybean exports.
UnitedHealth’s (UNH.N) 3.6 percent rise to a record high after the largest U.S. health insurer’s upbeat forecast boosted the healthcare sector.
European equities ended higher, with Italian bank stocks gaining 4 percent .FTIT8300 after Monte dei Paschi’s rescue plan got off to an encouraging start. Italian insurer Generali’s board approved a conversion of 400 million euros in Monte’s subordinated bonds into shares, according to Italian press reports. (BMPS.MI) (GASI.MI)
Europe's broad FTSEurofirst 300 index .FTEU3 finished up 0.26 percent at 1,343.68.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 nations, rose 0.66 point or 0.2 percent, to 414.30.
In addition to its bank sector, Italy was also in focus ahead of a constitutional referendum on Sunday.
Italian 10-year government yields IT10YT=RR fell below 2 percent after Reuters reported that the European Central Bank is ready to buy more Italian bonds if there is turmoil after the constitutional referendum on Sunday.
The political risk kept the euro restrained despite the
pullback in the dollar. The single currency EUR= was last up 0.3 percent at $1.0648.
The dollar index .DXY fell 0.4 percent on profit-taking, paring its month-to-date gain to 2.6 percent.
The greenback’s decline was compounded by lower U.S. yields, with 10-year Treasury yield US10YT=RR falling 2 basis points to 2.30 percent.
Meanwhile, oil prices shed about 4 percent as OPEC members seemed to struggle with agreeing on a production cut to address a global supply overhang.
Brent crude LCOc1 settled down $1.86, or 3.86 percent, at $46.38 a barrel. U.S. crude CLc1 settled down $1.85 or 3.93 percent at $45.23 per barrel.
Spot gold prices XAU= fell $5.53 or 0.46 percent, to $1,187.85 an ounce.
Additional reporting by Tanya Agrawal, Anya George Tharakan in Bengaluru, Abhinav Ramnarayan in London, Wayne Cole in Sydney; Editing by Nick Zieminski and Dan Grebler