* ECB says it will speed up bond purchases
* U.S. initial jobless claims less than expected
* Graphic: World FX rates tmsnrt.rs/2egbfVh (Updates to open of U.S. markets, changes byline, dateline; previous LONDON)
NEW YORK, March 11 (Reuters) - A gauge of global stocks rose for a third straight session on Thursday to hit its highest level in two weeks, as a dip in government bond yields helped ease inflation worries and provided a boost to stocks.
Euro zone bond yields fell after the European Central Bank said it was ready to accelerate money-printing to keep a lid on euro zone borrowing costs, using its 1.85 trillion Pandemic Emergency Purchase Program (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs.
Germany’s 10-year government bond yield last rose 8/32 in price to yield -0.334%, after reaching as low as -0.367, its lowest level since Feb. 18, and further away from the near one-year high of -0.203% in late February.
Yields on the benchmark 10-year Treasury fell as low as 1.475%, the first time it had fallen below 1.5% in a week before turning slightly higher.
On Wall Street, the easing inflation worry helped support equities, with the highly valued technology sector leading the way higher, up 2.02%. Expensive stocks, many of which are in the tech sector, have been highly sensitive to the rise in yields.
In contrast, shares of bank stocks only gained 0.13%.
“The inflation scare that we saw last week has subsided as bond yields calm down,” said Art Hogan, chief market strategist at National Securities in New York.
“The market sentiment is turning more optimistic as we get better results from (COVID-19) vaccines that help towards a faster pace of herd immunity.”
The Dow Jones Industrial Average rose 282.47 points, or 0.87%, to 32,579.49, the S&P 500 gained 43.16 points, or 1.11%, to 3,941.97 and the Nasdaq Composite added 267.60 points, or 2.05%, to 13,336.43.
Sentiment was also boosted by weekly jobless claims data, which pointed to a recovering U.S. labor market as vaccine rollouts have helped lead to economic reopenings.
Benchmark 10-year notes last fell 5/32 in price to yield 1.5352%, up from 1.52% late on Wednesday.
Investors will now eye an auction of 30-year debt on Thursday, seeking to cover massive shorts. A weak seven-year auction in late February helped fuel inflation concerns and sent yields higher.
European stocks climbed, with the pan-European STOXX 600 index reaching a one-year peak and on track for its fourth straight day of gains. The STOXX 600 index rose 0.46% and MSCI’s gauge of stocks across the globe gained 1.27%.
Analysts largely expect inflation to pick up as vaccine rollouts lead to a reopening of the economy, but worries persist that additional stimulus in the form of a $1.9 trillion coronavirus relief package set to be signed by U.S. President Joe Biden could overheat the economy.
The dollar was weaker for a third straight day coming off a 3-1/2-month high of 92.506. The dollar index fell 0.291%, with the euro up 0.31% to $1.1962.
Oil prices resumed their climb following two days of declines, buoyed by the brightening economic outlook and a steep decline in U.S. fuel stocks.
U.S. crude recently rose 1.77% to $65.58 per barrel and Brent was at $69.17, up 1.87% on the day.
Reporting by Chuck Mikolajczak; Additional reporting by Medha Singh and Shashank Nayar in Bengaluru; editing by Jonathan Oatis