Trade conflict looms but higher rates, oil prices help some stocks

NEW YORK (Reuters) – A world stock index climbed as bank and energy shares rose on Friday, but the momentum was sapped by a report that Washington may fire a new salvo in its trade dispute with Beijing.

Traders work on the floor at the New York Stock Exchange (NYSE) at the end of the day’s trading in Manhattan, New York, U.S., August 27, 2018. REUTERS/Andrew Kelly

U.S. President Donald Trump has directed aides to place U.S. tariffs on about $200 billion of Chinese goods, according to a person familiar with the matter. Bloomberg News first reported Trump’s action.

That news deflated the confidence of investors, who earlier pushed the MSCI All-Country World index, which tracks shares in 47 countries, to its highest level since Sept. 4. The index last rose 0.12 percent on the day.

On Wall Street, financial shares were helped by higher rates, which are seen to benefit banks, which can charge higher interest. Energy stocks got a boost from rising oil prices.

The Dow Jones Industrial Average fell 74.57 points, or 0.29 percent, to 26,071.42, the S&P 500 lost 7.54 points, or 0.26 percent, to 2,896.64 and the Nasdaq Composite dropped 29.94 points, or 0.37 percent, to 7,983.77.

Benchmark 10-year Treasury notes briefly hit the psychologically significant 3 percent level for the first time in more than a month as prices on U.S. government bonds fell on economic data that seems solid enough to support plans by the Federal Reserve to raise rates another two times in 2018.

U.S. crude rose 0.82 percent to $69.15 per barrel and Brent was last at $78.34, up 0.2 percent on the day. [O/R] The United States is renewing sanctions on Iran, a major oil producer, after withdrawing from a nuclear deal forged in 2015 between Tehran and world powers.

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