Reuters | Jul 02, 2020 04:50
* Factory data points to global increase in activity
* Gold touches 8-year peak before pulling back
* Crude prices rise on inventories, factory data
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Updates to U.S. stock market close)
By Rodrigo Campos
NEW YORK, July 1 (Reuters) - Stocks across the globe rose on
Wednesday following data pointing to a recovery in manufacturing
and on bets for a COVID-19 vaccine, while the risk-on mood
pushed the U.S. dollar lower.
Germany's manufacturing sector contracted at a slower pace
in June, while activity in the United States hit a 14-month
high. French factory activity rebounded into growth, and
activity in China's factories offered further signs that the
world's second-largest economy may have passed the worst of the
devastation caused by the pandemic. On Thursday, the market's focus will be on the U.S. non-farm
payrolls report for June.
Pfizer shares PFE jumped 3% after a COVID-19 vaccine
developed jointly with Germany's BioNTech BNTX.O was found to
be well tolerated, the fourth early-stage drug to show promise
in human testing. The news comes as a Reuters analysis showed coronavirus
cases more than doubled in 14 U.S. states last month and fears
are growing that the case-load could prompt fresh lockdowns.
"Pfizer news was certainly an impetus for the market to move
even higher but in general it is this very positive momentum,
looking beyond this re-spreading of the virus, looking beyond
that to eventual treatments, eventual vaccine and eventual safe
openings of the economy," said Tim Ghriskey, chief investment
strategist at Inverness Counsel in New York.
The Dow Jones Industrial Average .DJI fell 77.91 points,
or 0.3%, to close at 25,734.97, the S&P 500 .SPX gained 15.57
points, or 0.50%, to 3,115.86 and the Nasdaq Composite .IXIC
added 95.86 points, or 0.95%, to 10,154.63.
The pan-European STOXX 600 index .STOXX rose 0.24% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
Emerging market stocks rose 0.60%, while Japan's Nikkei
futures NKc1 lost 0.45%.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS closed 0.43% higher.
The stronger data and vaccine news weighed on the dollar,
which has been bid on days when traders have been less risky.
"There's definitely a risk-on tone to the market, which
continues to bet on the fact that we're past the worst point of
COVID. But I think the jury is still out on that judgment," said
Boris Schlossberg, managing director at BK Asset Management in
"There's a significant risk of reclosing some of the states.
There's still a lot of risk-off flows, and the dollar could be
the beneficiary of those flows," he added.
The dollar index =USD fell 0.256%, with the euro EUR= up
0.18% to $1.1251. The Japanese yen strengthened 0.45% versus the
greenback at 107.46 per dollar, while Sterling GBP= was last
trading at $1.2477, up 0.63% on the day.
The global rise in manufacturing activity put a bid under
energy prices, also supported by a bigger-than-expected drop in
U.S. crude inventories.
"Largely we are moving forward in the way of demand and not
backward, despite the negative view of coronavirus cases
rising," said Tony Headrick, energy markets analyst at CHS
U.S. crude CLc1 recently rose 1.2% to $39.74 per barrel
and Brent LCOc1 was at $41.93, up 1.6% on the day.
Treasury yields also rose with the risk-on sentiment.
Benchmark 10-year notes US10YT=RR last fell 8/32 in price
to yield 0.6774%, from 0.653% late on Tuesday.
The 30-year bond US30YT=RR last fell 11/32 in price to
yield 1.4245%, from 1.411%.
Gold XAU= prices rose to their highest in nearly 8 years
at $1,788.96 an ounce, and recently dropped 0.6% to $1,770.57 an
World financial markets in 2020 https://tmsnrt.rs/2BmerLo
World FX rates in 2020 http://tmsnrt.rs/2egbfVh
Written By: Reuters
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