Oil rebounds but jitters keep Treasury yields, dollar down

Tue Jun 6, 2017 5:07pm EDT
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By Hilary Russ

NEW YORK (Reuters) - Oil prices edged up on Tuesday, bouncing after sliding below $47 a barrel on pressure from a Mideast diplomatic rift, while U.S. Treasury yields and the dollar dropped to recent lows and world stocks dropped as political uncertainty pushed investors away from risky assets.

The yen and gold gained as caution prevailed and ahead of testimony from the former head of the FBI, a British election and the European Central Bank's next move, which all happen on Thursday.

"We have risk events piling up," said Blake Gwinn, U.S. rates strategist at NatWest Markets in Stamford, Connecticut. "We'll be very focused on what happens on Thursday, but it might end up being a dud."

Leading Arab powers including Saudi Arabia, Egypt and the United Arab Emirates cut ties with Qatar on Monday, accusing it of supporting Islamist militants and Iran.

U.S. crude CLcv1 rose 1.35 percent to $48.04 per barrel and Brent LCOcv1 was last at $49.94, up 0.95 percent on the day.

Wall Street closed lower for a second day after both European and Asian stocks dropped during their sessions.

The largest weight on the S&P 500 was Amazon (AMZN.O: Quote), down 0.8 percent. Walmart (WMT.N: Quote) fell 1.7 percent to $78.93 after Amazon said it would offer its Prime subscription service at a discount to U.S. customers on government aid, taking aim at a piece of Walmart's customer base.

The Dow Jones Industrial Average .DJI fell 47.81 points, or 0.23 percent, to 21,136.23, the S&P 500 .SPX lost 6.77 points, or 0.28 percent, to 2,429.33 and the Nasdaq Composite .IXIC dropped 20.63 points, or 0.33 percent, to 6,275.06. [nL3N1J34CK]   Continued...

A U.S. five dollar note is seen in this illustration photo June 1, 2017.     REUTERS/Thomas White/Illustration