* Stocks fall in risk-off trading, led by energy sector
* Oil sinks 1 percent on rising rig count figures
* U.S., European bond yields fall from highs
(Updates to U.S. market open, recasts throughout, adds quote)
By Dion Rabouin
NEW YORK, Oct 17 Stocks around the globe were
lower on Monday and European bond yields fell from four-month
highs as worries continued over the health of the global
U.S. stocks remained near their late Friday levels as the
global risk-off mood clashed with a well-received earnings
update from Bank of America, the country's second-largest bank
A dip in energy and healthcare stocks offset the boost to
financials from Bank of America's strong results.
"I think we're headed for a bumpy session with earnings
leading the way," said Peter Cardillo, chief market economist at
First Standard Financial in New York. "It's also a jittery
market ahead of the elections and of course the prospects of a
rate hike (by the U.S. Federal Reserve) in December."
The Dow Jones industrial average rose 2.64 points, or
0.01 percent, to 18,141.02, the S&P 500 gained 0.42
points, or 0.02 percent, to 2,133.4 and the Nasdaq Composite
added 1.82 points, or 0.03 percent, to
A gauge of equity markets around the globe
fell 0.2 percent. A measure of European shares was down
Oil fell more than 1 percent as a rising U.S. rig count left
investors worrying about the prolonged glut. The energy sector
led all S&P components lower, down 0.75 percent in early
U.S. and European government bonds reversed earlier selling
and rose in price after benchmark 10-year Treasury note yields
hit their highest since June 2 and German and British bonds
touched their highest since late June.
Buying in Treasuries was spurred by bargain-hunting
investors who scooped up government debt when prices fell on
Friday following comments from Federal Reserve Chair Janet
Yellen that the central bank may tolerate inflation above its
2-percent goal, analysts said.
The rise in prices also followed a sub-par reading from the
New York Fed's gauge on regional business activity in October.
The 10-year U.S. Treasury note rose 5/32 in
price to yield 1.775 percent, falling from a high of 1.814
British 10-year government bond yields were last
at 1.131 percent, falling from 1.223 percent in European
trading, the highest since June 20.
German 10-year bunds were last yielding 0.064
percent, falling from 0.104 percent, their highest since June
Safe-haven gold also edged up as buyers began to
resurface after a 6 percent fall over the last few weeks.
"Markets are reacting to the possibility that the Fed might
join the Bank of Japan in conducting policy to steepen the yield
curve," Ric Spooner, chief market analyst at CMC Markets in
Sydney, wrote in a note.
"In the Fed's case, this might amount to running the
gauntlet of higher inflation with a very slow pace of monetary
Oil prices, up for four straight weeks, have helped drive
the pickup in inflation globally.
Brent crude futures was down a little over 1 percent
at $51.40, with U.S. crude futures at $49.75 per barrel.
(Reporting by Dion Rabouin; Editing by Nick Zieminski)