U.S. stocks rise, dollar falls, as stimulus hopes revive

By Matt Scuffham NEW YORK (Reuters) - U.S. equities rallied on Tuesday, fed by investor optimism that a deal would be agreed in Washington to provide new relief measures and help the U.S

Reuters October 21, 2020 01:05:49 IST
U.S. stocks rise, dollar falls, as stimulus hopes revive

US stocks rise dollar falls as stimulus hopes revive

By Matt Scuffham

NEW YORK (Reuters) - U.S. equities rallied on Tuesday, fed by investor optimism that a deal would be agreed in Washington to provide new relief measures and help the U.S. economy withstand the impact of the coronavirus pandemic.

Gold edged higher and the dollar weakened as hopes for a U.S. coronavirus aid package ahead of the presidential election boosted bullion's appeal as an inflation hedge.

President Donald Trump on Tuesday pushed for a comprehensive COVID-19 relief package, saying he would accept a deal worth more than $2.2 trillion despite opposition to large spending measures among his fellow Republicans in the U.S. Senate.

Trump spoke as talks between House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin approached a Tuesday deadline for reaching a bipartisan deal that could pass Congress before Election Day on Nov. 3.

"I think there's still that belief that stimulus is going to happen," said Ed Moya, senior market analyst at OANDA, adding that he remained skeptical.

The Dow Jones Industrial Average <.DJI> was up 249.70 points, or 0.89%, at 28,445.12 and the S&P 500 <.SPX> was up 33.38 points, or 0.97%, at 3,460.30. The Nasdaq Composite <.IXIC> was up 98.53 points, or 0.86%, at 11,577.41.

Shares in Procter & Gamble Co rose 2% as coronavirus -driven home cleaning pushed sales of the consumer goods giant's home care products as much as 30% higher.

European stocks fell as worries about coronavirus curbs and Brexit countered optimism generated by strong earnings, including from Swiss bank UBS.

Italy, Spain and Britain imposed curbs to limit the spread of new coronavirus cases that threaten to derail a budding economic recovery. The latest curbs in Ireland will see GDP fall by 3.5% this year, Finance Minister Paschal Donohoe said.

The pan-region STOXX 600 <.STOXX> has recovered about 35% from a pandemic-panic plunge in March, but is struggling to reach pre-crisis levels, plateauing as the second-wave of the disease grips. On Tuesday, the index closed down 0.35%.

The European Union and Britain struggled to make progress on a trade deal to avoid a fast-approaching disruptive finale to the five-year drama of Britain's departure from the EU.

Sterling rose against the dollar but fell versus the strong euro, with investors still searching for clues on how likely it was that Britain would reach a trade deal with the European Union by the end of the year.

The British government has said it sees no basis to restart the talks with the European Union unless there is a fundamental change in approach.

The pound was up 0.2% at $1.2968 , while against the euro it was down 0.4% at 91.26 pence , having slipped earlier to a two-week low of 91.48 pence.

The dollar dipped, but moves were muted as investors awaited the outcome of stimulus talks.

The dollar index <=USD> declined 0.31%, putting it on track for a second day of declines.

Spot gold rose 0.4% to $1,912.71 per ounce. U.S. gold futures settled up 0.2% at $1,915.40.

Oil edged up on stimulus hopes, but the threat to demand from rising coronavirus cases worldwide and increased Libyan output kept prices from moving higher.

Brent crude futures settled up 1.15% at $43.11 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled 1.54% higher at $41.46 a barrel.

Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> dropped 0.2%, while Australian <.AXJO> and Japanese <.N225> markets dipped.

(Editing by Jonathan Oatis and Nick Zieminski)

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

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