US stocks gain, gold hovers near all-time high as Russia-Ukraine talks in view

By Stephen Culp

NEW YORK (Reuters) -Wall Street stocks ended higher and gold held near $3,000 per ounce on Monday after mixed economic data and ahead of talks between U.S. President Donald Trump and Russian President Vladimir Putin aimed at ending the Ukraine war.

Over the weekend, U.S. strikes against Yemen's Houthi movement threatened to escalate tensions in the oil-rich Middle East, driving crude prices higher on supply fears.

All three major U.S. stock indexes were in positive territory, with weakness in Tesla, Nvidia and Amazon.com shares holding the Nasdaq's gains in check.

Trump said he would speak with Putin on Tuesday to discuss a potential Russia-Ukraine cease-fire proposal, which could alleviate some geopolitical uncertainty.

"There has been a pretty big selloff, so some sort of a rebound, is to be expected and I think that's part of what we're seeing," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. "And the prospect of Russia and Ukraine developing a cease-fire that could end up leading to a more permanent peace, it's positive for markets, not just in the U.S. but globally."

Weaker-than-expected U.S. retail sales data was at least partially attributable to cheaper gasoline; a solid rebound in online receipts and an upside surprise in the core measure showed underlying consumer strength.

"We had relatively weaker than expected (retail sales) for February, which would tend to indicate less inflationary pressures that would potentially offset the effect of tariffs," Pursche added.

The U.S. Federal Reserve and other central banks are expected to convene for policy meetings this week, but are largely expected to keep to the sidelines until the ramifications of Trump's multi-front tariff war can be further assessed.

The Dow Jones Industrial Average rose 353.44 points, or 0.85%, to 41,841.63, the S&P 500 rose 36.18 points, or 0.64%, to 5,675.12 and the Nasdaq Composite rose 54.58 points, or 0.31%, to 17,808.66.

European shares extended their rally as Germany's debt reform plans helped to boost confidence that Europe's largest economy will increase spending and kick-start growth.

Investors were also focused on the outcome of Ukraine-Russian cease-fire talks, which could translate to lower energy costs for Europe.

European stocks have handily outperformed their global counterparts so far this year.

Europe's broad FTSEurofirst 300 index rose 18.02 points, or 0.83%.

MSCI's gauge of stocks across the globe rose 7.35 points, or 0.88%, to 843.49.

The pan-European STOXX 600 index rose 0.79%, while Emerging market stocks rose 12.69 points, or 1.13%, to 1,132.30. MSCI's broadest index of Asia-Pacific shares outside Japan closed higher by 1.25%, to 588.94, while Japan's Nikkei rose 343.42 points, or 0.93%, to 37,396.52.

The U.S. Treasury yield curve flattened amid mixed retail sales data, while shorter-dated yields rose on worries that the U.S. economy will soften while the Fed holds its restrictive policy rate steady.

The yield on benchmark U.S. 10-year notes fell 1 basis points to 4.299%, from 4.308% late on Friday.The 30-year bond yield fell 2.3 basis points to 4.5919% from 4.615% late on Friday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.3 basis points to 4.048%, from 4.015% late on Friday.

The dollar hovered near a five-month low against the euro as uncertainties arising from Trump's trade policies kept investors cautious on the dollar.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.33% to 103.39, with the euro up 0.38% at $1.092.

Against the Japanese yen, the dollar strengthened 0.29% to 149.05.

The Mexican peso < MXN=> weakened 0.08% versus the dollar at 19.953.

The Canadian dollar strengthened 0.6% versus the greenback to C$1.43 per dollar.

Crude oil prices were supported by supply concerns arising from the U.S. vow to continue its attacks targeting Iran-aligned Houthis in Yemen, while encouraging economic data from China supported the demand side of the coin.

U.S. crude rose 0.60% to settle at $67.58 per barrel, while Brent settled at $71.07 per barrel, up 0.69% on the day.

Gold gained ground, hovering around the $3,000 level it breached for the first time last week as investors focused on this week's rate decision from the Federal Reserve.

Spot gold rose 0.56% to $3,000.76 an ounce. U.S. gold futures rose 0.23% to $3,001.50 an ounce.

(Reporting by Stephen Culp; Additional reporting by Amanda Cooper in London; Editing by Sharon Singleton and Sandra Maler)