NEW YORK (Reuters) - Stock markets worldwide rose modestly on Tuesday after a landmark nuclear deal between Tehran and six global powers left sanctions on Iran in place for now, spurring gains in energy shares, while expectations for weak corporate results capped U.S. share gains.
Brent and U.S. crude reversed losses which came after the nuclear deal was reached. The deal, which is set to ease sanctions against Tehran and allow a gradual rise in its oil exports, had initially sent oil prices tumbling.
Benchmark Brent crude futures LCOc1 settled up 66 cents, at $58.51 a barrel. Prices had fallen almost $2 earlier. U.S. crude futures CLc1 finished up 84 cents at $53.04 after declining earlier to $50.38.
The rebound boosted the S&P energy index .SPNY, which ended 0.84 percent higher, while the STOXX 600 Europe Oil & Gas Index .SXEP closed up 0.84 percent. Healthcare stocks also rallied, with the S&P 500 health index .SPXHC ending 1 percent higher.
“When investors took a closer look at the terms of the (nuclear) agreement, they realized it would not lead to an immediate increase in supply,” said Wayne Lin, portfolio manager at QS Investors in New York. “That led to oil prices and oil stocks moving higher.”
Expectations for weak corporate earnings reports and data showing disappointing June retail sales in the United States, along with a decline in shares of auto makers in Europe, capped equities gains.
U.S. companies are expected to report their worst sales declines in nearly six years when they post second-quarter results, while earnings are expected to have fallen 2.8 percent, according to the latest Thomson Reuters estimates.
MSCI’s all-country world stock index .MIWD00000PUS, which tracks shares in 45 nations, was last up 2.44 points, or 0.57 percent, at 429.63.
The Dow Jones industrial average .DJI closed up 75.9 points, or 0.42 percent, at 18,053.58. The S&P 500 .SPX closed up 9.35 points, or 0.45 percent, at 2,108.95. The Nasdaq Composite .IXIC finished up 33.38 points, or 0.66 percent, at 5,104.89.
The pan-European FTSEurofirst 300 index .FTEU3 closed up 0.53 percent, at 1,580.34.
The unexpected drop in U.S. June retail sales data added to speculation that tepid economic data may push back when the Federal Reserve is likely to begin raising interest rates. That speculation halted Monday’s rally in the dollar and sent Treasury yields lower.
The data increased focus on Fed Chair Janet Yellen’s Humphrey-Hawkins testimony to Congress on Wednesday and Thursday. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.2 percent at 96.662 .DXY. [ID:nL2N0ZU1SO]
“It was disappointing news for dollar bulls,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York, in reference to the retail sales data. “It makes it more likely that the Fed will wait at least until December” to hike rates, he said.
Benchmark 10-year U.S. Treasury notes US10YT=RR were last up 7/32 in price to yield 2.40 percent, from a yield of 2.43 percent late on Monday. Yields move inversely to prices.
U.S. gold futures GCv1 for August delivery settled down 0.2 percent at $1,153.50.
Additional reporting by Nigel Stephenson in London, Karen Brettell in New York, and Tanya Agrawal in Bangalore; Editing by Jonathan Oatis and Chris Reese