Global Markets: Stocks slide on surging virus cases, stimulus doubts; dollar rises
By Rodrigo Campos
NEW YORK (Reuters) - Stocks fell globally on Monday as rising coronavirus cases in Europe and the US clouded the global economic outlook and gave the dollar a sure boost.
The United States, Russia, and France set new records for coronavirus infections daily as the virus recurrence swelled in parts of the northern hemisphere and some countries were forced to impose new curbs.
The spreading pandemic as well as no clear progress on a US stimulus package and caution about the US presidential election on November 3rd have pushed the MSCI World Equity Index down.
"The market is vulnerable to these 'bad headlines' because investors are generally so optimistic right now," said Willie Delwiche, investment strategist at Baird in Milwaukee.
MSCI stocks hit a record high worldwide in September and broke against it earlier this month.
"The market is set to disappoint at this point," said Delwiche.
The Dow Jones Industrial Average fell 712.83 points, or 2.52%, to 27,622.74, the S&P 500 fell 73.34 points, or 2.12%, to 3,392.05, and the Nasdaq Composite fell 189.90 points or 1.64% to 11,358.38.
The pan-European STOXX 600 index lost 1.72% and the MSCI global stock index lost 1.69%.
Emerging market stocks lost 0.66%. MSCI's broadest index for stocks in the Asia-Pacific region outside of Japan closed 0.41% while Japan's Nikkei fell 0.09%.
According to a Reuters tally, Europe was the second region after Latin America after more than 250,000 deaths on Saturday, as many European countries reported the highest number of COVID-19 cases in a single day.
Sentiment was also hit by a poll showing that German business morale fell for the first time in six months in October.
Reports of progress on a COVID-19 vaccine developed by Oxford University and manufactured by drug maker AstraZeneca Plc helped limit some of the market sell-off, according to analysts.
As markets tighten the chances of a Democratic President and Congress, likely spurring government spending and borrowing, US 10-year Treasury yields hit 0.872%, their highest level since early June last week.
"We've increased the likelihood of a Democratic sweep, already our base case, from 40% to just over 50% and increased our expectation that (Democratic presidential candidate) Biden will win from 65% to 75%," said analysts at NatWest Markets . "We see steeper US yield curves and a weaker USD than likely in our base case."
The 10-year benchmark debt was last up 13/32 to 0.7977%, down from 0.841% late Friday.
BlackRock Inc, the world's largest wealth manager, downgraded US Treasuries on Monday, upgrading their inflation-linked counterparts ahead of the US election.
Despite encouraging news about a COVID-19 vaccine from Oxford, rising coronavirus cases have put investors in the safety of the dollar.
"Skittish investors are taking advantage of the greenback as virus cases accelerate around the world, Washington business talks remain pending and concerns about the US presidential election mount," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The dollar index rose 0.316% and the euro 0.43% to USD 1.1808.
The Japanese yen lost 0.15% against the greenback at 104.90 per dollar, while the pound sterling last traded at $ 1.3007, down 0.25% on the day.
On the commodity markets, Spotgold gained 0.2% to USD 1,904.46 an ounce. Silver fell 1.02% to $ 24.33.
Oil prices have prolonged last week's losses. OPEC's secretary-general said an oil market recovery could take longer than hoped as coronavirus flexions increase globally and OPEC and its allies "stay on course" to level the market.
US crude fell 3.64% to $ 38.40 a barrel and Brent fell $ 40.37, down 3.35% on the day.
(Reporting by Rodrigo Campos; additional reporting by Lewis Krauskopf and Gertrude Chavez-Dreyfuss in New York, Ross Gerber in Boston, Tom Arnold in London and Wayne Cole in Sydney; editing by Susan Fenton)
Click to receive the most important news as a notification!
The Black Eyed Peas tops charts in move to Latin music
I tried 5 hot-chocolate recipes from celebrity chefs, and my favorite is also a little boozy
Zendaya Is the New Face of Valentino
Amid pandemic, Britain's Prince William tours country by train
Economic Data Deluge
Christmas tree-lighting in Bethlehem a muted, virtual event