* Upbeat data lures back investors to U.S. stocks, dollar steadies
* Brazilian benchmark stock index tumbles
* Yield rise as stocks gain, political concerns remain (Updates prices, adds oil settlements)
By Saqib Iqbal Ahmed
NEW YORK, May 18 (Reuters) - U.S. stocks recovered ground on Thursday as stronger-than-expected U.S. economic data soothed nerves a day after U.S. biggest selloff in more than eight months, but a key index of global equity markets remained near a three-week low.
Robust U.S. economic data helped the U.S. dollar reverse early losses against a basket of major currencies as focus turned to a widely anticipated increase in overnight interest rates by the Federal Reserve.
Still, reports that Trump had tried to intervene in an investigation into alleged Russian meddling in last year's U.S. presidential election, and that his aides had numerous undisclosed contacts with Russian officials kept market tensions high. to market jitters across the Americas, Brazilian stocks triggered a 30-minute halt to trading after the benchmark Bovespa index fell 10 percent following a report President Michel Temer gave his blessing to an attempt to pay to silence a potential witness in the country's biggest-ever graft probe. iShares MSCI Brazil ETF EWZ tumbled 13.8 percent in 8.9 times the average volume over the past 10 trading days.
The MSCI's all-country world equity index .MIWD00000PUS was down 0.33 percent after dipping to its lowest since April 25 earlier in the day.
The index found some support on Wall Street. U.S. stocks recovered ground after a near 2 percent selloff on Wednesday on the S&P 500, as upbeat economic data emboldened investors to return to the market. whole bull market is all about panic attacks followed by relief rallies, and this was another one," Ed Yardeni, president of Yardeni Research Inc in Brookville, New York.
New applications for U.S. jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls tumbled to a 28-1/2-year low, pointing to rapidly shrinking labor market slack. Dow Jones Industrial Average .DJI rose 104.67 points, or 0.51 percent, to 20,711.6, the S&P 500 .SPX gained 14.1 points, or 0.60 percent, to 2,371.13 and the Nasdaq Composite .IXIC added 49.90 points, or 0.83 percent, to 6,061.14.
The pan-European FTSEurofirst 300 index .FTEU3 closed down 0.89 percent at 7,436.42 ending off lows. Treasury yields rose from one-month lows as stocks recovered from Wednesday's dramatic drop, reducing demand for safe-haven bonds. 10-year notes US10YT=RR were down 5/32 in price to yield 2.23 percent, up from 2.22 percent late on Wednesday.
Spot gold XAU= dropped 1.0 percent to $1,247.36 an ounce.
The U.S. dollar reversed early losses against a basket of major currencies getting a boost from the better-than-expected U.S. data. readings on jobless claims and the Philly Fed index back expectations for faster (second quarter) growth and a Fed rate hike next month," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The dollar index .DXY rose 0.39 percent, with the euro EUR= down 0.57 percent to $1.1094. commodities markets, oil prices rose ahead of next week's Organization of the Petroleum Exporting Countries meeting as key producing countries suggested they would adhere to production cuts to reduce a global crude glut. Brent crude futures LCOc1 ended the session 30 cents higher at $52.51 a barrel while U.S. crude futures CLc1 settled up 28 cents at $49.35.
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http://tmsnrt.rs/2egbfVh Global assets in 2017
http://reut.rs/1WAiOSC Global bonds dashboard
http://tmsnrt.rs/2fPTds0 Global market cap
http://reut.rs/2mcp7T1 Emerging markets in 2017
http://tmsnrt.rs/2ihRugV
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