GLOBAL MARKETS-Global stocks rally as yields step back

(Adds comment, updates prices)
* Nasdaq surges after confirming correction
* European stocks close up 0.8%
* Oil prices retreat
* U.S. Treasury yields fall
* Gold rises on weaker dollar, yields

By Chuck Mikolajczak and Matt Scuffham
NEW YORK, March 9 (Reuters) - A gauge of global stocks
headed for its biggest one-day percentage climb in a week on
Tuesday as a fall in U.S. Treasury yields eased concerns the
economic recovery could overheat and lead to
stronger-than-expected inflation.
With eyes on the $120 billion auctions of 3-, 10- and
30-year Treasuries this week, U.S. Treasury yields fell after a
weak 7-year note sale that prompted a spike in yields two weeks
ago was followed by another soft auction last week. Benchmark 10-year notes US10YT=RR last rose 18/32 in price
to yield 1.5316%, down from 1.594% late on Monday. The note has
topped 1.6% three times since Feb. 25, reaching levels not seen
in over a year.
"It is important to put it into context - the 10-year has
gone from 1% to 1.60%," said Andrew Mies, chief investment
officer at 6 Meridien in Wichita, Kansas. "If it goes to 2%
nobody will be particularly surprised. I don't think many people
would expect it to go to 2.5%."
Tuesday's auction of $58 billion in U.S. 3-year notes was
well received, with the next tests of investor appetite for
government debt in the form of 10-year and 30-year auctions
later this week.
On Wall Street, each of the major averages closed higher,
led by a gain of nearly 4% in the Nasdaq, giving the tech-heavy
index its best day since Nov. 4.
The index has been highly susceptible to climbing rates, and
Monday's retreat left it down more than 10% from its Feb. 12
close, confirming what is widely considered to be a correction.
The Dow Jones Industrial Average .DJI , after earlier
topping 32,150, rose 30.3 points, or 0.1%, to end at 31,832.74,
the S&P 500 .SPX gained 54.09 points, or 1.42%, to 3,875.44
and the Nasdaq Composite .IXIC added 464.66 points, or 3.69%,
to 13,073.83.
"Today the 10-year is down a bit, and that takes pressure
off valuations, so tech is performing well. The market is just
about getting comfortable at this level of rates," said Kristina
Hooper, chief global market strategist at Invesco in New York.
In Europe, stocks closed higher after extending gains from
their best session in four months a day earlier as a rise in
shares of oil and utility companies helped counter losses in
miners. The pan-European STOXX 600 .STOXX rose 0.8%, with the
utility sector .SX6P rising more than 1.5%.
Investors will closely watch a European Central Bank meeting
later this week for whether policymakers have decided to step up
the pace of emergency bond purchases to appease skittish
markets.
Data on Tuesday showed the ECB barely nudged up its
emergency bond purchases last week even before subtracting debt
that matured over that period, raising fresh questions about the
central bank's resolve to curb a bond market sell-off.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.35%.
The speedier rollout of COVID-19 vaccines in some countries
and the planned $1.9 trillion U.S. stimulus package helped
underpin a brighter global economic outlook, the Organisation
for Economic Cooperation and Development said, as it raised its
2021 growth forecast to 5.6%.
In foreign exchange markets, the dollar index =USD backed
away from a 3-1/2-month high, allowing riskier currencies such
as the Aussie AUD=D3 and the Kiwi dollar NZD=D3 to move
higher. The dollar index =USD fell 0.434%, with the euro EUR= up
0.48% to $1.19.
Oil prices backed off early highs in choppy trading, with
Brent dipping back to the $68 mark as investors weighed easing
concerns over a supply disruption in Saudi Arabia with the
likelihood of limited supply from OPEC+ output limits.
U.S. crude futures CLc1 settled at $64.01 per barrel, down
$1.04 or 1.60%. Brent crude futures LCOc1 settled at $67.52
per barrel, down 72 cents or 1.06%.
Gold surged more than 2% on the retreat in U.S. Treasury
yields and the weaker dollar, staging a strong recovery from the
nine-month low it hit in the previous session.
Spot gold XAU= added 2.1% to $1,717.08 an ounce.
U.S. gold futures GCv1 settled up 2.3% at $1,716.90.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
2021 asset performance http://tmsnrt.rs/2yaDPgn
World FX rates in 2021 http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>