By David Randall
NEW YORK, July 5 (Reuters) – Stock markets in Europe and the U.S. advanced on Thursday as reassuring economic data from Germany and a report that its big carmakers could be spared from U.S. tariffs offset another gloomy session for Asia.
Shares of Mercedes-maker Daimler, BMW, Porsche and Volkswagen surged as much as 5 percent after reports of a U.S. offer to suspend tariff threats on EU-made cars if the bloc lifts duties on U.S. vehicles.
That fueled wider gains, with the European auto sector enjoying its best day in more than two years. The mood was also helped by a stronger-than-expected jump in German industrial orders after four months of declines.
“With these stories coming out (about car tariffs), you have a sector which has been very oversold meeting some potential good news on the trade war front,” said Bank of America Merrill Lynch European equity strategist James Barty.
“This is going to be the dominant issue of the summer. Are we heading for a full-blown trade war? In which case, it is very bad news for risk assets; or do we walk away from it, in which case, as we have seen today, markets are likely to rebound quite sharply.”
On Wall Street, the Dow Jones Industrial Average rose 74.82 points, or 0.31 percent, to 24,249.64, the S&P 500 gained 8.18 points, or 0.30 percent, to 2,721.4 and the Nasdaq Composite added 25.23 points, or 0.34 percent, to 7,527.90.
MSCI’s gauge of stocks across the globe gained 0.23 percent.
The euro briefly topped $1.17 and bond yields rose after the brighter German data and a report that the ECB thinks markets are now