Stocks wobble on COVID-19, U.S. election uncertainty; dollar slips

In this news, we discuss the Stocks wobble on COVID-19, U.S. election uncertainty; dollar slips.

NEW YORK (Reuters) – A gauge of global stock markets dipped slightly and the US dollar fell on Tuesday as investors grappled with a spike in coronavirus cases and uncertainty over the impending US election.

The MSCI index of equities across the world lost 0.14%, with the pan-European STOXX 600 index losing 0.95%. Major Wall Street indices were mixed in afternoon trading, a day after the S&P 500 posted its largest drop in a month, with the S&P 500 and Dow industrials in negative territory, but the Nasdaq, very technological, winner.

“The factors that contributed to yesterday’s sale – COVID trends and electoral uncertainty – are likely to persist this week,” said Keith Lerner, chief market strategist at Truist / SunTrust Advisory.

“It’s a bit of a low conviction tug of war until we get past the election and see what the impact of the rising COVID numbers is.”

The United States, Russia, France and other countries have seen a record number of infections in recent days, and European governments have decided to put new brakes in place in an attempt to curb a rapid increase in cases.

Ahead of the US presidential election on November 3, former Vice President Joe Biden is leading President Donald Trump in national opinion polls. But the race is tight in key battlefield states that could decide the outcome, and investors had pointed to a tightening of the elections as a factor in Monday’s volatility.

On Wall Street, the Dow Jones Industrial Average fell 143.36 points, or 0.52%, to 27,542.02, the S&P 500 lost 3.04 points, or 0.09%, to 3,397.93 while that the Nasdaq Composite added 67.26 points, or 0.59%, to 11,426.20.

Investors also focused on a busy week of corporate earnings. Caterpillar shares fell 3.7% and 3M fell 1.8% after the respective earnings reports of the two industrial companies.

In foreign exchange markets, the dollar index, which measures the greenback against a basket of currencies, fell 0.272%, with the euro up 0.17% to $ 1.1828.

Yields on US Treasuries have fallen and the yield curve has been flatter as hopes faded for a stimulus deal in Washington to arrive soon. Eurozone bond yields also fell.

“The market wants some kind of stimulus. It’s not yet understood, ”said Eric Jussaume, director of fixed income at Cambridge Trust.

The US 10-year benchmark notes last rose 7/32 to yield 0.7793%, up from 0.803% on Monday night.

Crude rebounded as companies halted some US oil production in the Gulf of Mexico ahead of a storm, although soaring coronavirus infections and rising Libyan supply have limited earnings.

US crude was last up 2.28% to $ 39.44 per barrel and Brent was at $ 41.15, up 1.71% on the day.

Additional reporting by Ross Kerber in Boston, Elizabeth Howcroft in London; Editing by Bernadette Baum

Original © Thomson Reuters

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