Shares rise as oil prices rebound; dollar slips

S&P energy index, STOXX 600 Europe Oil & Gas Index end 0.84% higher

Stock markets worldwide rose modestly on Tuesday after a landmark nuclear deal between Tehran and six global powers left sanctions on Iran in place for now, spurring gains in energy shares, while expectations for weak corporate results capped US share gains.

Brent and US crude reversed losses which came after the nuclear deal was reached. The deal, which is set to ease sanctions against Tehran and allow a gradual rise in its oil exports, had initially sent oil prices tumbling.

Benchmark Brent crude futures settled up 66 cents, at $58.51 a barrel. Prices had fallen almost $2 earlier. US crude futures finished up 84 cents at $53.04 after declining earlier to $50.38.

The rebound boosted the S&P energy index, which ended 0.84% higher, while the STOXX 600 Europe Oil & Gas Index closed up 0.84%. Healthcare stocks also rallied, with the S&P 500 health index ending 1% higher.

"When investors took a closer look at the terms of the (nuclear) agreement, they realized it would not lead to an immediate increase in supply," said Wayne Lin, portfolio manager at QS Investors in New York. "That led to oil prices and oil stocks moving higher."

Expectations for weak corporate earnings reports and data showing disappointing June retail sales in the United States, along with a decline in shares of auto makers in Europe, capped equities gains.

US companies are expected to report their worst sales declines in nearly six years when they post second-quarter results, while earnings are expected to have fallen 2.8%, according to the latest Thomson Reuters estimates.

MSCI's all-country world stock index, which tracks shares in 45 nations, was last up 2.44 points, or 0.57%, at 429.63.

The Dow Jones industrial average closed up 75.9 points, or 0.42%, at 18,053.58. The S&P 500 closed up 9.35 points, or 0.45%, at 2,108.95. The Nasdaq Composite finished up 33.38 points, or 0.66%, at 5,104.89.

The pan-European FTSEurofirst 300 index closed up 0.53%, at 1,580.34.

The unexpected drop in US June retail sales data added to speculation that tepid economic data may push back when the Federal Reserve is likely to begin raising interest rates. That speculation halted Monday's rally in the dollar and sent Treasury yields lower.

The data increased focus on Fed Chair Janet Yellen's Humphrey-Hawkins testimony to Congress on Wednesday and Thursday. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.2% at 96.662. 

"It was disappointing news for dollar bulls," said Vassili Serebriakov, currency strategist at BNP Paribas in New York, in reference to the retail sales data. "It makes it more likely that the Fed will wait at least until December" to hike rates, he said.

Benchmark 10-year US Treasury notes were last up 7/32 in price to yield 2.40%, from a yield of 2.43% late on Monday. Yields move inversely to prices.

US gold futures for August delivery settled down 0.2% at $1,153.50.