Virus, stimulus angst hit world stocks as safe U.S. dollar shines
By Koh Gui Qing and Huw Jones NEW YORK/LONDON (Reuters) - Global shares dropped on Thursday as investors shied from risk and sought safe-havens such as the U.S. dollar on fears that a resurgence in coronavirus cases and a lack of more U.S. fiscal stimulus would hobble the world economy
By Koh Gui Qing and Huw Jones
NEW YORK/LONDON (Reuters) - Global shares dropped on Thursday as investors shied from risk and sought safe-havens such as the U.S. dollar on fears that a resurgence in coronavirus cases and a lack of more U.S. fiscal stimulus would hobble the world economy.
An unexpected rise in U.S. weekly jobless claims figures added to worries that the U.S. economy may sputter if government does not act soon to shore up growth, especially in the face of a spike in COVID-19 cases in Europe.
The run of negative news dragged on European shares, which were on course for their worst day in 3-1/2 weeks.
An offer by U.S. President Donald Trump on Thursday to raise the size of a U.S. fiscal stimulus package to win the support of Republicans and Democrats helped to narrow losses in equity markets, though many investors still believe a deal is not possible before the Nov. 3 election.
The S&P 500 <.SPX> fell 17 points, or 0.5%, to 3,472.06, while the Dow Jones Industrial Average <.DJI> shed 59 points, or 0.2%, to 28,452.89. The Nasdaq Composite <.IXIC> lost 119 points, or 1%, to 11,648.74.
"Virus restrictions across Europe continue to sour sentiment," wrote Win Thin and Ilan Solot, currency strategists at BBH Global Currency Strategy, adding that a U.S. fiscal stimulus package is "deader than Elvis."
"Now, the U.S. economy goes into the winter months without much-needed fiscal stimulus," they wrote in a note.
The pan-European STOXX 600 <.STOXX> skidded 2.1% to a near two-week low, marking its biggest one-day fall in almost -1/2 weeks. London's FTSE 100 fell 1.7% to a near two-week low as worries about the pandemic and uncertainty around a Brexit trade deal spurred investors to book profits.
MSCI's broadest index of Asia-Pacific shares <.MIAPJ0000PUS> lost 1.3% with Hong Kong <.HSI> and India <.NSEI> both down over 2% and Japan's Nikkei <.N225> closing down 0.5%.
Underlining concerns about the health of the world economy, data showed on Thursday China's factory gate prices fell at a faster-than-expected rate in September while consumer inflation slowed to its weakest pace in 19 months.
The shift toward safety helped the U.S. dollar, a traditional safe-haven asset. The greenback <=USD> jumped 0.4% against a basket of six major currencies to 93.809.
A firmer dollar dragged on sterling
Traders' preference for safety helped government bonds. Germany's government bonds
Gold reversed earlier losses to trade in the black, helped in part by Trump's comments that he was keen on more U.S. fiscal stimulus before the November election. Spot gold
Oil prices, however, were weighed by concerns about the coronavirus and its impact on the world economy, though losses narrowed compared to earlier in the day.
(Reporting by Koh Gui Qing; Editing by Will Dunham and Nick Zieminski)
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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
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