NEW YORK, Dec 20 (Reuters) - MSCI's global equities index was gaining ground on Wednesday while Treasury yields fell as U.S. economic data beat expectations and UK inflation slowed.
Oil prices, meanwhile, hit their highest level in nearly three weeks, as traders dealt with worries about disruptions in the Red Sea after Yemen's Iran-aligned Houthi militants stepped up attacks on commercial ships.
The dollar rose against other major currencies on Wednesday, while sterling fell sharply after UK inflation plunged in November to its lowest rate in more than two years at 3.9%. That was far lower than the 4.4% economists polled by Reuters had expected, making it less of an outlier globally.
In U.S. economic data, existing home sales rose unexpectedly in November, but further gains may be limited by a housing shortage while mortgage rates retreat from 23-year highs.
Also, amid optimism about the labor market, the Conference Board said its consumer confidence index increased to 110.7 this month from November's downwardly revised 101.0. Economists had expected an increase to 104.0 from 102.0 as previously reported.
"We got a series of beats on the economic data this morning. Existing home sales and consumer confidence both beat expectations and that seems to be putting a little bit of a damper on bond yields," said Sameer Samana, Senior Global Market Strategist at Wells Fargo Investment Institute in Charlotte, NC.
And with data suggesting that the economy is "headed toward a softish landing" this leads investors to favor more economically sensitive sectors such as energy and consumer discretionary over defensive sectors such as consumer staples, according to Samana.
The Dow Jones Industrial Average fell 1.13 points to 37,556.79, the S&P 500 gained 1.82 points, or 0.04%, to 4,770.19 and the Nasdaq Composite added 34.09 points, or 0.23%, to 15,037.31.
The pan-European STOXX 600 index rose 0.21% and MSCI's gauge of stocks across the globe gained 0.12%.
Benchmark U.S. 10-year Treasury yields fell to an almost five-month month low as government bond yields fell globally after the British inflation data.
The yield on 10-year notes was down 1.5 basis points to 3.907%, from 3.922% late on Tuesday. The 30-year bond yield was up 0.4 basis points to 4.0395%, from 4.036%. Two-year yields were down 5.1 basis points to 4.386%, from 4.437%.
In currencies, the dollar index rose 0.069%, with the euro down 0.08% to $1.0971.
The Japanese yen strengthened 0.10% versus the greenback to 143.69 per dollar, while Sterling was last trading at $1.2668, down 0.49% on the day.
In commodities, global oil benchmark Brent hovered above $80 a barrel amid jitters over global trade disruption and geopolitical tensions in the Middle East following attacks on ships in the Red Sea by Yemen's Iran-aligned Houthi forces.
U.S. crude rose 1.14% to $74.78 per barrel and Brent was at $80.03, up 1.01% on the day.
Gold prices were virtually unchanged while traders braced for a slew of economic data later in the week that could offer fresh clues on the U.S. central bank's monetary policy path.
Spot gold dropped 0.3% to $2,034.49 an ounce. U.S. gold futures fell 0.16% to $2,035.20 an ounce.
(Additional reporting by Yoruk Bahceli in Amsterdam, Stella Qui in Sydney; Editing by Alexander Smith, Kirsten Donovan)
