Rising U.S. coronavirus cases hurt stocks, push debt yields lower
By Herbert Lash NEW YORK (Reuters) - Government debt yields and global equity markets fell on Thursday as a growing number of U.S. coronavirus cases weighed on risk sentiment that also was hurt by deteriorating U.S.-China relations and discouraging Chinese data
By Herbert Lash
NEW YORK (Reuters) - Government debt yields and global equity markets fell on Thursday as a growing number of U.S. coronavirus cases weighed on risk sentiment that also was hurt by deteriorating U.S.-China relations and discouraging Chinese data.
A jump in the number of U.S. COVID-19 cases has forced states such as California to reduce business activity again, sparking fears of further economic damage and taking the shine off a Wall Street rally built on recovery hopes.
The pandemic continues to surge in many Southern and Western states, with 67,404 new U.S. cases reported as of Wednesday by the Centers for Disease Control and Prevention. The number of new cases in European and Asian developed countries is in the hundreds, with the exception of Russia and the UK, according to daily situation reports by the World Health Organization.
Data showed that the resurgence in new cases was chipping away at a budding recovery. While U.S. retail sales rose a better-than-expected 7.5% in June, a Labor Department report showed 1.3 million people filed for state unemployment benefits during the week ending July 11, down just 10,000 people from the prior period.
The S&P 500, less than 6% off from its all-time peak in February, slipped from a rally that pushed it to a five-week high.
U.S. stocks are taking a pause after a strong run-up in recent days, said Jon Adams, senior market strategist at BMO Global Asset Management in Chicago.
"There is a bit more concern today at least around the resurgence of the virus, and initial jobless claims were a bit higher than expectations," Adams said.
"We do think we might see a pause in the resumption of economic recovery that we've seen over the last couple of months," he said.
MSCI's world equity index <.MIWD00000PUS>, which tracks shares in 49 nations, fell 0.89% to 544.9.
On Wall Street, the Dow Jones Industrial Average <.DJI> fell 0.88%, the S&P 500 <.SPX> lost 0.67% and the Nasdaq Composite <.IXIC> dropped 0.93%.
Treasury yields fell and gold eased, though futures contracts remained above $1,800 an ounce. The 10-year Treasury note
Relations between the world's two largest economies have sunk to the lowest point in decades with new points of contention surfacing almost daily.
The Trump administration is considering banning travel to the United States by all members of the Chinese Communist Party and their families, a person familiar with the matter said, a move that would worsen already-tense U.S.-China relations.
China accused the United States of "gangster logic" after President Donald Trump ordered an end to Hong Kong's special status under U.S. law in response to China's imposition of new security legislation on the former British colony.
Asian stock markets fell overnight and the Chinese yuan
The risks to China's economy were partly reflected in data that showed Chinese consumers kept their wallets tightly shut in June. Retail sales slid 1.8%, the fifth month of decline and worse than a forecast for 0.3% growth last month.
In currency markets the euro
Economic activity in the 19-country euro zone had shown signs of a "significant, though uneven and partial recovery," European Central Bank President Christine Lagarde said.
But the outlook remained uncertain amid risks of a second wave of infections and the ECB will use its stimulus firepower fully even as the euro zone economy shows some signs of rebounding from its pandemic-induced recession, Lagarde said.
Oil prices eased after OPEC and allies such as Russia agreed to taper record supply curbs from August, though the drop was cushioned by hopes for a swift pickup in U.S. demand after a big drawdown from the country's crude stocks.
Brent crude futures
Spot gold prices fell below the $1,800 an ounce, but futures held above the key level. U.S. gold futures
(Reporting by Herbert Lash; Editing by Bernadette Baum and Jonathan Oatis)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.