NEW YORK: The global bond market rout slowed on Thursday as long-term borrowing costs retreated from their highest levels in more than five months, helping a mild recovery on Wall Street and for European stocks.
The absence of a deal between Greece and its creditors, however, was a drag on stocks and the euro.
Investors' stampede from stocks and bonds this week sent major European indexes to their lowest in two months and major U.S. and Japanese gauges to the weakest in a month.
U.S. Federal Reserve Chair Janet Yellen's warning about high equity valuations on Wednesday added pressure to U.S. stocks ahead of Friday's U.S. jobs report, which may support expectations of a possible Fed rate increase later this year.
"We had a real capitulation in markets this morning and there was no obvious catalyst," said Owen Callan, a senior analyst at Cantor Fitzgerald in Dublin. "We then had some bargain hunters coming in later in the day, but the moves have been driven by more speculative hedge funds."
A retreat in European bond yields from their session peaks caused the euro to decline from a 10-week high against the dollar.
Oil prices scaled back from their highest level so far in 2015 on perception of ample supply despite data that showed the first weekly drop in U.S. crude inventories since January.
A bounce in the dollar and elevated bond yields touched off a second day of selling in gold.
Bond markets were at the center of this week's rout, prompted by heavy supply and less pessimism about Europe, with German Bunds on track for their biggest weekly spike in yields in over a decade.
Italian and Spanish yields hit 2 percent for the first time this year, French yields topped 1 percent and U.S. Treasuries, the benchmark for borrowing costs globally, briefly broke 2.3 percent.
Global yields receded from their initial Thursday peaks on bargain-hunting, led by Japanese investors who had been out of the market due to the three-day Golden Week holiday, analysts and traders said.
In midday U.S. trading, the Dow Jones industrial average rose 67 points, or 0.38 percent, to 17,908.98, the S&P 500 gained 6.14 points, or 0.3 percent, to 2,086.29 and the Nasdaq Composite climbed 17.87 points, or 0.36 percent, to 4,937.51.
FTSEurofirst index of top European shares provisionally closed up nearly 0.1 percent to 1,549.02, erasing an earlier 1.8 percent loss.
Tokyo's Nikkei ended down 1.2 percent.
The MSCI world equity index, which tracks shares in 45 nations, fell 0.3 percent to 433.23.
In the currency market, the euro hit a 10-week high against the dollar at $1.13920 earlier before easing down to $1.1287 , down 0.5 percent from Wednesday's close.
The dollar index firmed at 94.552, up 0.5 percent.
Sterling dipped 0.1 percent versus the greenback amid an expected tight parliamentary election.
Brent crude was last down $1.36, or 2.01 percent, at $66.41 a barrel. U.S. crude was last down $1.23, or 2.02 percent, at $59.7 per barrel.
Spot gold prices fell $7.2 or 0.60 percent, to $1,184.10 an ounce.
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