* World stock index ends up after biggest fall in index
* Dollar boosted by safety bid on recession fears
* 10-year Treasury yield slides
* Copper falls to 17-month low
NEW YORK, July 1 (Reuters) - The second half of the year
started with gains in global stock indexes on Friday ahead of
the long U.S. holiday weekend, while the 10-year Treasury yield
fell the most since COVID-19 hit markets in March 2020.
Copper prices slumped to their weakest in 17 months.
Stocks were lower early in the New York session but rallied
late to end higher. U.S. markets will be closed Monday for the
U.S. Fourth of July holiday.
"It's a Friday before a long weekend, so market movements
can be somewhat exaggerated," said Peter Cardillo, chief market
economist at Spartan Capital Securities in New York.
Cardillo said he expects stock market performance to improve
overall in the second half of the year.
"We're going to see more green days in the second half than
we'll see red," Cardillo said.
The U.S. benchmark S&P 500, which closed out its
worst first-half since 1970 on Thursday, climbed 1.1%. MSCI's
world stocks index, which on Thursday notched
its biggest percentage decline for the first half of the year
since its 1990 creation, rose 0.4%.
The Dow Jones Industrial Average rose 321.83 points,
or 1.05%, to 31,097.26, the S&P 500 gained 39.95 points, or
1.06%, to 3,825.33 and the Nasdaq Composite added 99.11
points, or 0.9%, to 11,127.85.
The pan-European STOXX 600 index lost 0.02% and
MSCI's gauge of stocks across the globe gained 0.39%.
In Treasuries, yields tumbled as investors priced in the
likelihood the Federal Reserve will force inflation down to near
its target rate.
The yield on 10-year notes tumbled 23.3 basis
points from the open to the session's lowest point, before
paring the decline, to end down 8.5 basis points at 2.889%.
The two-year yield, which typically moves in step
with interest rate expectations, slid 8.8 basis points to
2.839%. Both the two-year and 10-year yields were at roughly
Data on Friday showed manufacturing production in the euro
zone fell for the first time last month since the initial wave
of the coronavirus pandemic in 2020, while inflation numbers hit
another record high.
In the United States, manufacturing activity slowed more
than expected in June, with a measure of new orders contracting
for the first time in two years, more evidence the economy was
cooling amid aggressive monetary policy tightening by the
Copper prices dropped as investors worried about a possible
recession hitting demand for metals.
Three-month copper on the London Metal Exchange had
eased 2.6% to $8,047 a tonne after dropping to its lowest since
early February 2021 at $7,955.
Oil prices climbed amid supply outages in Libya and expected
shutdowns in Norway, which offset worries that an economic
slowdown could dent demand.
Brent crude futures settled at $111.63 a barrel,
rising $2.60, or 2.4%. U.S. crude settled at $108.43 a
barrel, gaining $2.67, or 2.5%.
The dollar was up on Friday, having just scored its best
quarter since 2016. Pessimism about the global economic outlook
boosted demand for the safe-haven U.S. dollar Friday while the
Australian dollar, a proxy for global growth, fell to a two-year
The dollar index gained 0.36% against a basket of
currencies to 105.12. It is holding just below a 20-year high of
105.79 reached on June 15. The Australian dollar fell as low as
67.64 cents, the weakest since June 2020.
Bitcoin, which suffered its biggest quarterly
drop on record over the three months to the end of June, last
fell 2.16% to $19,494.40.
(Reporting by Caroline Valetkevitch; Additional reporting by
Herbert Lash and Karen Brettell in New York; and Marc Jones in
London and Tom Westbrook in Singapore; Editing by Sriraj
Kalluvila, Will Dunham and Chris Reese)