New York: Developed markets rebounded as investors took solace from a second day of gains in oil prices, though assets in emerging economies told a different story amid a sell-off in Turkish bonds.

The S&P 500 Index rebounded from a three-week low and European stocks rose for the first time in a week. Crude rallied after US output fell the most in eight months and as wildfires disrupted production in Canada. Turkish 10-year bond yields topped 9.5 per cent as the prime minister said he was stepping down.

While oil’s renewed rally from a 12-year low boosted shares in energy producers, concern remains that global growth is tepid. Investors are looking toward Friday’s payrolls report to gauge prospects for higher US interest rates after data Thursday showed jobless claims climbed to a five-week high last week. Federal Reserve bank chiefs in Atlanta and San Francisco said this week that a June increase could be in the cards.

“There’s still a very cautious feeling to markets,” said William Hobbs, who helps oversee about $150 billion as head of investment strategy at the wealth-management unit of Barclays Plc in London. “The world is growing and is likely to grow a bit quicker as we go through the year and inflation returning and that’s simply not priced in at these levels.”

Stocks

The S&P 500 rose 0.4 per cent at 10:06am in New York, halting a two-day slump that took it to the lowest level since April 11. A rally that sent the S&P 500 up as much as 15 per cent lost steam after reaching a four-month high on April 20, amid lacklustre earnings and lukewarm signs of an economic pickup.

Among stocks moving on corporate news Thursday, Tesla Motors Inc climbed after the electric-car maker moved up its timeline for producing 500,000 vehicles annually. Yahoo! Inc, which owns a stake in Alibaba Group Holding Ltd, increased after the Chinese e-commerce company’s quarterly revenue surpassed estimates.

The Stoxx Europe 600 climbed 0.1 per cent, after gaining as much as 0.7 per cent. Trading volume was 25 per cent lower than the 30-day average amid holidays in markets including Switzerland, Denmark, Sweden and Finland.

Bonds

US. Treasuries due in a decade fell for the first time in three days, pushing their yield to 1.78 per cent. Traders are awaiting further insight into the state of labour market from the monthly payrolls report on Friday. Treasury yields also rose as the dollar advanced against the yen.

Jobless claims rose by 17,000 to 274,000 in the week ended April 30, according to the Labor Department. The median forecast in a Bloomberg survey was 260,000. Data tomorrow will probably the labour remained steady, with 200,000 jobs added last month after a 215,000 increase in March, another survey showed.

Turkish bonds fell, sending 10-year yields to a one-month high, after Prime Minister Ahmet Davutoglu lost a power struggle with President Recep Tayyip Erdogan. The Borsa Istanbul 100 Index swung between gains and losses, while the lira gained 2.1 per cent after falling the most in eight years yesterday.

The cost of insuring against losses on Turkish bonds rose for a fifth day, climbing five basis points to 265 basis points, the highest since April 8, data compiled by Bloomberg show. There were 7,370 credit-default swaps contracts outstanding as of April 29, covering a net $7.7 billion of Turkey’s debt, according to data from the Depository Trust & Clearing Corp

Currencies

Russia’s rouble climbed 1.5 per cent while Brazil’s real and the Mexican peso gained at least 0.7 per cent as oil advanced.

Poland’s zloty weakened 0.5 per cent against the euro. Finance Minister Pawel Szalamacha asked Constitutional Court Chief Justice Andrzej Rzeplinski to “refrain from commenting until May 13,” when Moody’s Investors Service gives a review of Poland’s credit rating, Rzeplinski told Rzeczpospolita daily, according to newspaper’s rp.pl website.

The Philippine peso fell to a two-month low versus the dollar as the May 9 presidential election draws closer. The currency has been weakening for three weeks as the mayor of Davao City, Rodrigo Duterte, rises in opinion polls. Duterte ranked third in a Bloomberg survey last month that asked analysts who was the best candidate to run the economy.

Australia’s dollar strengthened 0.7 per cent versus its US counterpart. The nation’s retail sales increased 0.4 per cent in March from the previous month, while the trade deficit was smaller than economists forecast. Reserve Bank of Australia Deputy Governor Philip Lowe will replace Glenn Stevens as head of the monetary authority in September.

Commodities

West Texas Intermediate crude climbed 4.4 per cent to $45.71 a barrel. US oil production dropped by 113,000 barrels a day to 8.83 million a day last week, the lowest level since September 2014, data showed Wednesday. Fires in Canada may affect more than 1 million barrels a day of capacity, according to company statements and data published in Alberta’s Spring Oil Sands Quarterly. Brent crude climbed 3.7 per cent to $46.26.

“The trend of declining US production is a real positive,” said Michael McCarthy, chief strategist at CMC Markets in Sydney. “I expect prices will probably touch the $48 to $50 zone. We will have to see significant inroads into crude stockpiles to push through that area.”

Iron ore futures fell for a third day in Dalian, China, declining as much as 4.8 per cent after the country took steps to limit speculation in commodities contracts. Contracts for steel reinforcement bar and coking coal also fell.

Gold for immediate delivery was little changed, after sliding more than 1 per cent over the last three days. Copper, aluminium, zinc and lead dropped by at least 1 per cent in London.