World shares higher as investors mull recovery outlook
NEW YORK: Global equity markets rose in choppy trading on Friday as concerns triggered by the US Federal Reserve’s less-than-optimistic outlook for an economic recovery and a jump in US coronavirus cases gave investors pause.
The three major US stock indexes rose by at least 1 percent, a day after the market’s worst single-day drop in three months. MSCI’s gauge of stocks across the globe gained 0.34 percent.
Spot gold prices rose as investors bought the safe-haven metal, with bullion heading toward its biggest gain since the week of April 10. Meanwhile, oil prices fell for the first time in seven weeks. Spot gold added 0.3 percent to $1,731.81 an ounce. US gold futures settled down 0.1 percent at $1,737.30.
Rich Meckler, partner at New Jersey-based Cherry Lane Investments, said Friday’s upswing indicated some investors are returning the markets, despite broad uncertainties about the economic recovery and future of the coronavirus pandemic.
“You could make the case that next year this time everything is back to normal, and you can make the case that it’s multiple years before we get back on path, and that’s what investors have been fighting,” over the past few days, Meckler said.
Worldwide health officials expressed concerns this week that countries, grappling with the devastating economic impact of lockdowns meant to stem coronavirus’s spread, are lifting restrictions too swiftly and risking a resurgence in cases.
Earlier this week, the Fed predicted a 6.5 percent decline in US output this year and said an economic recovery is some time off.
The Dow Jones Industrial Average rose 477.37 points, or 1.9 percent, to 25,605.54, the S&P 500 gained 39.21 points, or 1.31 percent, to 3,041.31 and the Nasdaq Composite added 96.08 points, or 1.01 percent, to 9,588.81. Despite that, all three major indexes suffered their biggest weekly percentage declines since the week ended March 20.
In Europe, the STOXX 600 Index snapped a four-day losing streak to rise 0.28 percent. Frankfurt’s DAX, Paris’s CAC40 and London’s FTSE were all in positive territory, the latter shrugging off data showing Britain’s economy shrank the most on record in April.
Spot gold rose 0.2 percent to $1,730.19 per ounce by 4:48 pm EDT (1810 GMT), up about 2.7 percent so this week. US crude oil futures settled at $36.26 a barrel, down 8 cents or 0.22 percent. Brent crude futures settled at $38.73 a barrel, up 18 cents or 0.47 percent. The three major US stock indexes posted their worst day on Thursday since mid-March, when markets were sent into free-fall by the abrupt economic lockdowns put in place to contain the pandemic.
In currencies, the pound shed early gains against the dollar after 10 consecutive days of gains. Sterling was last trading at $1.2519, down 0.64 percent. The dollar index rose 0.286 percent. The euro down 0.39 percent to $1.1253. US Treasury yields rose as stocks clawed back some ground. The 10-year US Treasury yield rose to 0.7067 percent. – Reuters