By Richard Leong
NEW YORK (Reuters) - Stock prices across major markets rose on Tuesday, led by gains in the U.S. technology and consumer sectors following the presidential debate between Hillary Clinton and Donald Trump, while oil prices fell on fading hopes of agreement on limiting production.
Anxiety about the fortune of Deutsche Bank curtailed Wall Street's advance and kept European equity markets little changed.
A firmer dollar in the aftermath of the first Clinton-Trump debate helped send gold prices lower.
U.S. and German government bond yields fell on safe-haven demand amid worries about Deutsche Bank and weaker oil prices. Investors have fretted over Germany's largest lender in the wake of a massive $14 billion demand from the U.S. Department of Justice to settle claims on bad mortgage-backed securities.
U.S. consumer stocks were bolstered after a report showed consumer confidence rose to its strongest in nine years in September.
"The number came in much better than expected, so consumer stocks seem to be catching a bit after having a hard time for probably a month or two," said Mark Spellman, portfolio manager at Alpine Funds in New York.
In early afternoon trading, the Dow Jones industrial average (DJI) was up 132.89 points, or 0.73 percent, to 18,227.72, the S&P 500 (SPX) rose 14.16 points, or 0.66 percent, at 2,160.26 and the Nasdaq Composite (IXIC) was up 46.15 points, or 0.88 percent, to 5,303.64.
Overseas equity markets initially rose as betting markets suggested Democrat Clinton won the first debate over Republican Trump on Monday, supporting the view of no radical changes in U.S. policies on the domestic economy, international trade and foreign policy.
Then Deutsche Bank shares (DE:DBKGn) dropped to another record low at 10.18 euros, leading to a reversal in European stocks that spread to selling in other regions.
Deutsche shares recovered following remarks from a Justice Department official on the possibility of lower mortgage-related penalties for banks if they cooperate with authorities.
Europe's broad FTSEurofirst 300 index (FTEU3) eked out a 0.06 percent gain at 1,339.11.
The MSCI world equity index (MIWD00000PUS), which tracks shares in 45 nations, rose 1.74 points or 0.42 percent, to 417.94.
The U.S. 10-year Treasury note (US10YT=RR) yield slipped 2 basis points to 1.565 percent, its lowest level in over two weeks, while the German two-year yield (DE2YT=RR) reached a near record low of -0.717 percent, according to Reuters data.
CRUDE PRICES RETREAT
Oil prices gave back some of Monday's gains on fizzling hopes of an agreement to freeze output as the world's largest producers gathered in Algeria to discuss ways to tackle a glut that has battered prices for two years.
Brent crude (LCOc1) was last down $1.30, or 2.75 percent, at $46.05 a barrel. U.S. crude (CLc1) was last down $1.25, or 2.72 percent, at $44.68 per barrel.
It was too early to determine whether Monday's presidential debate will result in sizable changes among American voters for either Clinton or Trump in the Nov. 8th election, but the dollar, together with the Mexican peso and other higher-yielding currencies, enjoyed a bump.
The dollar index (DXY) was up 0.1 percent at 95.407, while the Mexican peso
Mexico's currency had hovered near an all-time low at 19.735 pesos since last week on fears that a Trump presidency would threaten Mexico's exports to the United States, its single biggest market. [EMRG/FRX]
Spot gold prices