Stocks jittery as record US virus count weighs
NEW YORK: Global equity benchmarks edged higher after struggling for direction for most of the day and bond yields flat-lined on Friday as investors weighed a record number of new coronavirus cases in the United States against improving economic data in Europe and signs that Gilead Sciences Inc’s remdesivir drug helped reduce the risk of death in severely-ill COVID19 patients.
More than 60,500 new coronavirus infections were reported across the United States on Thursday, the largest single-day tally by any country since the virus emerged late last year in China. “The sharp increase in confirmed cases has led to growing concerns that a return to broad lockdowns lies ahead,” Goldman Sachs wrote in a note. “While lockdowns can slow down virus spread effectively, they come at very high economic cost.”
Economic data, however, continued to improve in the United States and Europe. The number of Americans filing for jobless benefits dropped to near a four-month low last week, and Italian industrial output rebounded much more strongly than expected in May after plunging in the previous two months due to a coronavirus lockdown. “The dispersion in macro forecasts
remains extremely high. It therefore should not surprise when you see market volatility turning on mixed pieces of news,” said Elliot Hentov, head of policy and research at State Street.
MSCI’s gauge of stocks across the globe gained 0.56 percent following broad gains in Europe and slight losses in Asia. Chinese shares fell 1.8 percent from a five-year high, as state media discouraged retail investors from chasing the market higher. On Wall Street, the Dow Jones Industrial Average made up early losses and rose 368.8 points, or 1.43 percent, to 26,074.89, the S&P 500 gained 32.96 points, or 1.05 percent, to 3,185.01 and the Nasdaq Composite added 69.69 points, or 0.66 percent, to 10,617.44.
Much of the day’s gains came after Gilead’s announcement of the apparent success of remdesivir, though the company cautioned that clinical trial were still necessary to confirm its benefits . Cases of the COVID-19 respiratory illness have been rising in some Asian and Australian cities that had appeared to have contained the disease, such as Tokyo, Hong Kong and Melbourne, prompting investors to move into perceived safe havens.
US Treasury yields edged higher after touching their lowest levels since late April. Benchmark 10-year notes last fell 9/32 in price to yield 0.6348 percent, from 0.605 percent late Thursday. Spot gold dropped 0.2 percent to $1,798.92 an ounce. US gold futures fell 0.01 percent to $1,799.00 an ounce. The International Energy Agency bumped up its 2020 oil demand forecast on Friday but said the spread of COVID-19 posed a risk to the outlook.—Reuters