Stocks set for quarterly gains, bond prices rise

By Herbert Lash

NEW YORK (Reuters) – Global stock markets were on track for their fourth straight quarter of gains on Monday, aided by loose monetary policies from major central banks, while concerns about geopolitics and the world’s economic health have underpinned government debt.

Stocks on Wall Street traded mixed, with the S&P 500 and Nasdaq Composite indexes set to close a sixth straight quarter of gains – a streak not seen since the euphoria over technology shares ended in 2000.

MSCI’s all-country index <.MIWD00000PUS>, which tracks shares in 45 countries, rose 0.19 percent. It has gained more than 4 percent this quarter, aided by the prospect that monetary policy in the major economies will remain accommodative for longer, and was set to post a fourth straight quarter of gains.

In Europe, the FTSEurofirst 300 index <.FTEU3> of top regional shares retreated at the end, falling 0.05 percent to close at 1,370.60. But it still posted fourth quarter in a row of gains.

Major stock indexes are up for the first half of the year and the S&P 500 has posted more than 20 record highs at the close so far, even as the U.S. Federal Reserve trims its economic stimulus.

“The Fed and other global monetary forces have done their best to keep this market as liquid as possible, and that liquidity is restricting investors from finding a place other than stocks and have enabled risk takers to stay confident,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Bond yields, expected to have risen after a run-up late last year, have broadly fallen. Barclays’ Aggregate U.S. bond index is up 3.82 percent in the first half as benchmark yields have fallen nearly half a percentage point.

The 10-year Treasury note rose 2/32 in price to yield 2.5232 percent.

The Dow Jones industrial average <.DJI> fell 19.06 points, or 0.11 percent, at 16,832.78. The Standard & Poor’s 500 Index <.SPX> was up 0.61 points, or 0.03 percent, at 1,961.57. The Nasdaq Composite Index <.IXIC> was up 12.28 points, or 0.28 percent, at 4,410.21.

A sense of complacency in markets drew the attention of the Bank for International Settlements – a forum of the world’s top central banks – which warned on Sunday that markets were increasingly out of sync with shaky global growth prospects.

Several early warning signs indicate building vulnerabilities in the financial systems of several countries, it said. Gold was steady near a two-month high, poised to set a second-straight quarterly gain after political tensions bolstered demand for the metal.

Spot gold was up $3.00 an ounce at $1,318.04 an ounce, having hit a two-month high of $1,325.90 last week.

The dollar remained under pressure, awaiting this week’s busy calendar of U.S. data, which includes the June non-farm payrolls report on Thursday, a day earlier than usual due to the U.S. Independence Day holiday on July 4.

The dollar fell versus the yen to a six-week low of 101.21 yen , and was last at 101.30, down 0.06 percent. The euro, meanwhile, rose to a three-week high of $1.3667 and last changed hands at $1.3688, up 0.3 percent.

Brent crude oil dropped below $113 a barrel as fears of a disruption to oil output from Iraq receded after government forces launched a pushback against a Sunni militant insurgency.

Brent was down $1.03 at $112.27 a barrel. U.S. crude lost 93 cents to $104.81 a barrel.

(Reporting by Herbert Lash; Additional reporting by Anirban Nag in London; Editing by Dan Grebler)

Stocks set for quarterly gains, bond prices rise