January 11, 2018 / 1:07 AM / 8 days ago

Brent hits $70 per barrel before retreating; equities rise with energy

NEW YORK (Reuters) - Brent crude prices hit $70 a barrel on signs of tightening crude stocks but settled off that level on Thursday, while a jump in energy shares helped lift U.S. stocks.

The S&P energy index .SPNY jumped 2 percent, leading gains among S&P sectors. Optimism about upcoming U.S. earnings also helped U.S. stocks, which resumed their 2018 rally to hit record closing highs.

“The unifying factor of today’s move and this whole week is a heightened confidence in the pace of economic activity. That helps explain the demand picture which has oil up at $70,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman, in New York.

Brent crude futures LCOc1 settled 6 cents higher at $69.26, after hitting $70.05 during the session, its highest level since November 2014. Brent’s settlement still represents a three-year closing high.

Brent has gained 5 percent since the beginning of the year, picking up from its late-year surge. U.S. crude CLc1 settled at $63.80, up 23 cents, the highest since December 2014.

The Dow Jones Industrial Average .DJI rose 205.6 points, or 0.81 percent, to 25,574.73, the S&P 500 .SPX gained 19.33 points, or 0.70 percent, to 2,767.56 and the Nasdaq Composite .IXIC added 58.21 points, or 0.81 percent, to 7,211.78.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.26 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.38 percent.

The euro jumped against the dollar as the European Central Bank signalled it could begin to wind down its 2.5-trillion euro stimulus programme this year.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., January 2, 2018. REUTERS/Lucas Jackson

The ECB should revisit its communication stance in early 2018, accounts of its December meeting showed, suggesting that policymakers could soon start preparing markets for the end of the bank’s massive stimulus.

The dollar index .DXY fell 0.44 percent, with the euro EUR= up 0.7 percent to $1.2029.

U.S. Treasury yields fell after China disputed a report that its government officials had recommended the country slow or halt its purchases of the U.S. bonds. The Bloomberg News report had lifted yields on the 10-year government bond to a 10-month high on Wednesday.

    Benchmark 10-year notes US10YT=RR last rose 4/32 in price to yield 2.5367 percent, from 2.549 percent late on Wednesday.

    Bitcoin BTC=BTSP was 4.8-percent lower at $14,168.95 on the Luxembourg-based Bitstamp exchange after South Korea's government said it plans to ban cryptocurrency trading.

    Graphic for MSCI, Nikkei datastream chart, click reut.rs/2sSBRiD

    Graphic for Global assets in 2018, click tmsnrt.rs/2jvdmXl

    Graphic for Emerging markets in 2018, click tmsnrt.rs/2ihRugV

    Additional reporting by Marc Jones in London and Saqib Iqbal Ahmed and Sinead Carew in New York; Editing by Nick Zieminski and Diane Craft

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