GLOBAL MARKETS-US dollar, stocks fall while Treasury yields rise – Reuters

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* Updates to late afternoon trading, adds commentary

* Crude oil rises following Wednesday’s slump

* Stocks fall as Treasury yields climb

* Fed minutes show lack of consensus on future policy

* ECB minutes show policymakers discussed removing easing

By Sinead Carew

NEW YORK, July 6 Stocks around the world fell
and U.S. Treasury yields rose on Thursday while the euro gained
on the U.S. dollar after minutes from the European Central
Bank’s latest meeting showed it could be open to scrapping its
bond-buying pledge.

Benchmark Treasury yields touched nearly eight-week highs on
the prospect of hawkish global central bank policy and as rising
oil prices suggested inflationary pressures.

Treasury yields helped push Wall Street stocks lower in a
holiday week ahead of the second-quarter earnings reporting

“More than anything you’ve had a fairly good-sized move up
on the 10-year Treasury (yield) over a short period. Investors
are on a very short term reacting to where yields are at this
moment compared with only a week ago,” said Jim Paulsen, chief
investment strategist at The Leuthold Group in Minneapolis.

Investors also worried that corporate earnings reports would
not “surprise as positively as they did in the first quarter,”
according to Chris Zaccarelli, Chief Investment Officer at
Cornerstone Financial Partners in Huntersville, NC.

The Dow Jones Industrial Average fell 94.71 points,
or 0.44 percent, to 21,383.46, the S&P 500 lost 14.63
points, or 0.60 percent, to 2,417.91 and the Nasdaq Composite
dropped 38.22 points, or 0.62 percent, to 6,112.64.

Europe’s Stoxx 600 index touched its lowest point
since April 21 and ended down 0.7 percent

MSCI’s gauge of stocks across the globe shed
0.38 percent.

Some investors were uneasy about geopolitical issues and
turned their focus to a summit of G20 nations after this week’s
test of a long-range missile by North Korea.

The dollar pulled back after weaker-than-expected U.S.
private jobs data affirmed expectations for a gradual pace for
U.S. interest rate hikes by the Federal Reserve.

The euro, which hit a session high versus the dollar in late
afternoon trading, gained on Thursday after ECB minutes showed
that policymakers discussed taking out an “easing bias” at their
June 7-8 meeting.

The dollar index fell 0.5 percent, with the euro
up 0.61 percent to $1.1421.

Benchmark 10-year notes was last down 11/32 in
price to yield 2.3713 percent, from 2.334 percent late on

The 30-year bond was down 31/32 in price to
yield 2.9016 percent, from 2.855 percent late on Wednesday.

“You’re seeing some liquidation as people are trying to wrap
their heads around what the central banks have in mind,” said
Lou Brien, a market strategist at DRW Trading in Chicago.

Commodity markets continued to swing. Oil futures rose,
making up some of the previous session’s losses after U.S. data
showed crude oil and gasoline stocks dropped more than expected,
yet more analysts cut price forecasts.

U.S. crude rose 0.44 percent to $45.33 per barrel
and Brent was last at $47.95, up 0.33 percent on the

Gold pared losses and was last down 0.2 percent at
$1,223.87 an ounce.

South Africa’s rand was down 0.3 percent and Turkey’s
lira fell 0.4 percent in their second consecutive day of

The rand extended Wednesday’s 1.6 percent drop driven by
proposals to nationalize South Africa’s central bank and
expropriate land without compensation.

(Additional reporting by Rodrigo Campos, Gertrude
Chavez-Dreyfuss and Samuel Forgione in New York, Marc Jones in
London and Nichola Saminather in Singapore; Editing by Catherine
Evans and James Dalgleish)