Stocks climb and US yields ease; yen jumps against dollar

NEW YORK, September 3 ------ Stock indexes mostly rose after three days of declines as investors watched for new developments in the U.S.-Iran conflict, while the Japanese yen rose sharply against the U.S. dollar. It was not immediately clear what prompted the yen to move. The currency had retraced over the last month about half of the gains made after a rare joint intervention by the U.S. and Japan at the end of July. The yen lasted up 0.79% at 158.92 per dollar.

U.S. Treasury yields eased from multi-year highs. The rise in borrowing costs across major economies had deepened concerns about tighter monetary policy and deteriorating fiscal conditions.

Investors remained focused on Iran. Fears of renewed escalation gripped the Middle East after the U.S. and Iran exchanged their biggest barrage since July. The flare-up threatens to deepen a conflict that has dragged on since the U.S. launched strikes on Iran in February.

Oil prices rose about 1% amid worries about further disruption to energy supplies. Brent crude futures gained 98 cents, or 1%, to settle at $95.63 a barrel. U.S. West Texas Intermediate crude futures rose 79 cents, or 0.9%, to settle at $91.01.

Wall Street stocks ended higher in a partial rebound from their recent fall, which was tied to the escalation in the Middle East and the global bond selloff. "We're seeing a little bit of a relief rally in stocks after the underperformance that came" with higher yields, said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Investors may be looking for bargains after the recent selling, he said. "The (U.S.) economy itself remains strong, so one of the difficulties in investing in stocks is that a strong economy often leads to higher rates, and you have that tension between good earnings and the potential for the competition that bonds can offer... Most investors have remained committed to stocks."

Source: reuters.com