Global Markets: Stocks approach new highs but healthcare caps Wall Street gains

By April Joyner

NEW YORK (Reuters) - Stocks around the globe rose on Tuesday to six-month highs as positive economic data in China and Germany boosted investor sentiment, though concerns about the impact of U.S. policy on the healthcare sector capped gains on Wall Street.

Wall Street’s S&P 500 edged higher after upbeat quarterly reports from Johnson & Johnson and BlackRock Inc, with financials leading gains. Healthcare stocks, however, turned lower as shares of insurers fell after UnitedHealth Group Inc discussed concerns about U.S. Senator Bernie Sanders’ “Medicare for All” plan, as well as the White House’s proposal to end discounts from drugmakers.

“The money seems to be rotating out of healthcare into financials,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “Thus far, I’d say earnings are somewhat as expected. The key thing out of the earnings season is going to be the second-half (of 2019) outlook.”

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Even though Wall Street stocks were treading water, an advance in Chinese and European shares helped push the MSCI world equity index to a six-month high. Positive data, including a quicker pace of growth in Chinese home prices and improving sentiment among German investors, bolstered global equities.

The latest leg higher in this year’s global rally comes as a degree of calm has descended across financial markets. European stock volatility reached its lowest level since January 2018, while on Wall Street, the CBOE Volatility Index hit its lowest level in more than six months.

The U.S.-China trade dispute, signs of slowing global corporate earnings and fears about an economic downturn have weighed on riskier assets in the past year. But investors have been quick to seize on positive news to keep the bull market running.

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“After the strong rally we have seen in equities, people are now waiting for the next catalyst,” said Natixis Cross Asset Strategist Florent Pochon.

Among the information investors are anticipating is Chinese quarterly economic growth data, due on Wednesday. After a worrying start to the year, Chinese numbers have been more positive as authorities ramped up stimulus measures, soothing investor fears about a slowdown in the world’s second-biggest economy.

The Dow Jones Industrial Average rose 73.28 points, or 0.28%, to 26,458.05, the S&P 500 gained 2.47 points, or 0.09%, to 2,908.05 and the Nasdaq Composite added 29.07 points, or 0.36%, to 8,005.08.

MSCI’s gauge of stocks across the globe gained 0.18%. The pan-European STOXX 600 index ended 0.3% higher.

As stocks advanced, U.S. Treasury yields rose to four-week highs. Benchmark 10-year notes last fell 11/32 in price to yield 2.5904%, from 2.553% late on Monday.

Even during this year’s rally in stocks, “the flight-to-quality bid in Treasury had not subsided,” JonesTrading’s O’Rourke said. “Now we’re starting to see the beginning of that, and that’s pushing yields higher.”

Spot gold prices dropped to their lowest level this year and were last down 0.9% as risk appetite dented demand for the precious metal’s safe-haven credentials.

In currency markets, sterling slipped 0.3% after the Guardian newspaper reported that talks between Prime Minister Theresa May and the opposition Labour Party regarding Britain’s exit from the European Union had stalled. The Labour Party denied the report.

The euro dipped after Reuters reported that some European Central Bank policymakers doubt whether growth will rebound in the euro zone as projected. The currency was last down 0.2% at $1.13.

The dollar index ticked up 0.1%.

Oil steadied as expectations of tightening global supply, raised by fighting in Libya and declining Venezuelan and Iranian exports, were offset by uncertainty about the commitment to an OPEC-led production cut.

Brent crude futures rose 31 cents to $71.49 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 40 cents to $63.80 a barrel.

(Reporting by April Joyner; Additional reporting by Tommy Wilkes and Marc Jones in London, Amy Caren Daniel in Bengaluru and Gertrude Chavez-Dreyfuss, Karen Brettell and Stephanie Kelly in New York; Editing by David Holmes, Ed Osmond and Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.