GLOBAL MARKETS-Stocks rally on renewed trade talk optimism, yields rise

(Adds U.S. market open, byline, dateline; previous LONDON)
* European stocks jump more than 1% after Trump remarks
* U.S.-China trade deal still possible-Bloomberg report
* U.S. stocks snap three-day losing streak
* Oil prices jump ahead of OPEC production talks
* Dollar slumps on weak U.S. data

By Herbert Lash
NEW YORK, Dec 4 (Reuters) - Government debt yields and a
gauge of global equity markets rose on Wednesday as sentiment
improved after U.S. President Donald Trump said trade talks with
China were going "very well" and a news report suggested key
differences were being ironed out.
European stocks rallied, with the blue-chip Euro STOXX 50
.STOXX50e , Germany's DAX .GDAXI and French CAC 40 .FCHI
gaining more than 1%. The news reversed overnight losses in Asia
when investors remained jittery over the prolonged talks.
The dollar slumped against the euro after the Institute for
Supply Management (ISM) reported activity in the U.S. services
sector slowed more than expected in November amid lingering
concerns about trade tensions and worker shortages. The poor ISM reading failed to derail the rally in equities
as the underlying economic data overall is getting better, said
Jim Paulsen, chief investment strategist at The Leuthold Group
in Minneapolis.
"It's looking more and more like two things: One, we've
certainly pushed back heavy fears of recession this year and the
next thing is the realization that we might be accelerating
again, not only here but globally," Paulsen said.
Trump, who on Tuesday had roiled markets after he raised the
prospect of extended U.S.-Sino trade tensions, told reporters at
a meeting of NATO leaders near London that "discussions are
going very well and we'll see what happens." Market sentiment rebounded earlier when Bloomberg reported
that the two sides were closer to agreeing on how many tariffs
would be rolled back in a "phase one" trade deal. MSCI's gauge of equity performance in 49 countries
.MIWD00000PUS gained 0.55% while stocks on Wall Street also
rose, snapping a three-day losing streak.
The Dow Jones Industrial Average .DJI rose 186.7 points,
or 0.68%, to 27,689.51. The S&P 500 .SPX gained 23.18 points,
or 0.75%, to 3,116.38 and the Nasdaq Composite .IXIC added
54.39 points, or 0.64%, to 8,575.03.
Investors also shrugged off a survey showing U.S.
private-sector job growth unexpectedly slowed to its weakest
pace in six months in November as goods producers and
construction firms cut jobs. Paulsen said the ADP National Employment Report is not that
closely correlated with the payrolls data compiled by the U.S.
Labor Department, which will release its November report on
Friday. A slowdown in jobs creation in a tight labor market is
understandable, he also said.
Yields on benchmark U.S. and euro zone government debt
rebounded, with the 10-year U.S. Treasury note US10YT=RJR
falling 19/32 in price to push its yield up to 1.7723%.
The 10-year German bund' s DE10YT=RR yield rose 1 basis
point to -0.337% and yields across the euro area followed suit,
rising by 1 to 2 basis points.
The dollar index .DXY fell 0.15%, with the euro EUR= up
0.05% to $1.1087.
The Japanese yen JPY= weakened 0.17% versus the greenback
to 108.85 per dollar.
Oil prices jumped ahead of an expected extension to
production curbs by the Organization of the Petroleum Exporting
Countries and its allies. More support came from industry data
showing a larger-than-forecast drop in U.S. crude stockpiles.
U.S. crude CLcv1 rose 3.9% to $58.29 a barrel. Brent crude
LCOc1 futures rose $2.11 to $62.93 a barrel.