GLOBAL MARKETS-German gloom, oil snuff out stocks rebound; U.S. Treasury yields rise

BY Reuters | TREASURY | 11/24/21 10:35 AM EST

* Wall Street lower on mixed economic data, disappointing retailer earnings

* German gloom sends euro, Frankfurt stocks lower

* Crude prices steady after U.S. move to tap stocks

* Bagful of U.S. data ahead of Thanksgiving holiday

* Turkish lira sinks again, dollar continues upward trend

By Chris Prentice and Huw Jones

WASHINGTON/LONDON, Nov 24 (Reuters) - Global shares were down and oil prices steadied on Wednesday after poorer prospects for Germany's economic recovery sent the euro to its weakest level since July last year and as investors weighed mixed U.S. economic data.

The Dow Jones Industrial Average fell 130.62 points, or 0.36%, to 35,683.18; the S&P 500 lost 17.23 points, or 0.37%, to 4,673.47; and the Nasdaq Composite dropped 97.47 points, or 0.62%, to 15,677.67 by 10:15 EST (1515 GMT).

Data showed U.S. weekly jobless claims fell and third-quarter GDP growth was revised higher, but other readings showed consumers paid much higher prices for goods through the third quarter, as inflation continued to grow.

Shares of department store operator Nordstrom Inc (JWN) and apparel retailer Gap Inc (GPS) plunged after the two warned of supply chain issues and rising costs heading into the crucial holiday season

Focus is also on minutes of the Federal Reserve's Nov. 2-3 meeting, due later in the day, for clues on the pace at which the central bank intends to taper COVID-era stimulus measures.

The STOXX index of 600 European companies had gained in early trading from Tuesday's three-week lows, but momentum was sapped by gloomy German business sentiment, leaving the benchmark down 0.12%. MSCI's gauge of stocks across the globe shed 0.44%.

Germany's Ifo index of business sentiment in November was 96.5, compared with a Reuters consensus forecast of 96.6, helping to send the DAX Germany blue chip index down 0.6%. The euro was down 0.3%.

November was the fifth month running of falling German business morale, blamed on supply bottlenecks in manufacturing and a spike in coronavirus infections, raising the prospect of Europe's biggest economy stagnating in the fourth quarter.

"It was slightly below what the market has been forecasting, which is not surprising considered the high corona numbers and the low percentage of vaccinated people," said Rene Albrecht, a rates analyst at DZ Bank.

Emerging market stocks lost 0.31%.

CRUDE GOES FLAT

Oil prices were steady as investors questioned the effectiveness of a U.S.-led release of oil from strategic reserves and turned their focus to how producers will respond.

Brent traded at $82.35, up 0.05% on the day, in choppy trading, with U.S. crude futures up slightly at $78.53 a barrel.

Elsewhere in commodities, gold prices dipped on a stronger dollar, set for a fifth consecutive session of losses. The currency's strength makes bullion more expensive to holders of other currencies. Spot gold dropped 0.5% to $1,780.11 an ounce.

U.S. Treasury yields continued to inch toward their highs for the year after data released Wednesday suggested the job market and consumer spending continue to improve.

The U.S. dollar continued its upward trend on renewed bets the Fed will hike rates to tame inflation. The dollar index rose 0.38% and touched a fresh 16-month high.

New Zealand's central bank raised interest rates for the second time in as many months, driven by inflationary pressures and as an easing of coronavirus restrictions supported economic activity.

The Turkish lira remained under pressure, falling 4.4% , compounding its historic nosedive on Tuesday as President Tayyip Erdogan defended recent rate cuts and vowed to win his "economic war of independence".

(Additional reporting by Abhinav Ramnarayan, Alun John, Hideyuki Sano; Editing by Chizu Nomiyama and Mark Potter)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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