NEW YORK, Feb 11 — Gold rose and the dollar hit a four-month high against the euro yesterday on safe-haven appeal as the death toll from the coronavirus outbreak passed that of the SARS epidemic two decades ago, but Wall Street rallied to record highs.

Worries about the coronavirus kept investors on edge, as the World Health Organisation warned transmission of the deadly virus among people who have not visited China could be "the spark that becomes a bigger fire.”

Deal talks and a rally in defensive sectors helped the broad pan-European STOXX 600 index close up 0.07 per cent, while Wall Street rebounded on the outlook for earnings and the economy, spurring the Nasdaq and S&P 500 to record closing highs.

Weak economic data in the eurozone made the dollar relatively more attractive than the single currency, especially considering Friday’s US non-farm payrolls report showing an acceleration in job growth in January.

Data yesterday revealed Italian industrial output was much weaker than expected in December, another setback for the euro after data on Friday showed German industrial output suffered its biggest fall since recession-hit 2009.

A gauge of global equity markets rose, lifted by US stocks after Wall Street rebounded, while key indexes for London , Paris and Frankfurt declined, weighed down on concerns about the extent of the coronavirus.

"We have the safe-haven bid from the coronavirus. That is killing EM and really benefiting the dollar, and to a lesser extent the yen and Swiss,” said Win Thin, global head of currency strategy at Brown Brothers Harriman in New York.

MSCI’s gauge of stocks across the globe gained 0.24 per cent, and emerging market stocks lost 0.46 per cent. In Europe, automakers, among the most exposed to China, fell 0.8 per cent.

On Wall Street, the Dow Jones Industrial Average rose 174.31 points, or 0.6 per cent, to 29,276.82. The S&P 500 gained 24.38 points, or 0.73 per cent, to 3,352.09 and the Nasdaq Composite jumped 107.88 points, or 1.13 per cent, to 9,628.39.

"We know the coronavirus will affect results at least in first quarter,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "(But) we’ll be back to growth as usual for the rest of the year.”

Investors continued to monitor the advance of the virus, which had killed more than 900 people as of Sunday, mostly in China’s provincial capital of Wuhan, the epicentre of the outbreak.

The full economic impact of the virus is still unknown but is expected to exacerbate a slowdown in the Chinese economy. Electric carmaker Tesla Inc rose 3.1 per cent, however, as its Shanghai factory returned to service.

The dollar index rose 0.17 per cent, with the euro down 0.28 per cent to US$1.0912 (RM4.53). The Japanese yen strengthened 0.03 per cent versus the greenback at 109.75 per dollar.

Bond yields fell. The benchmark 10-year US Treasury note rose 4/32 in price to yield 1.5628 per cent.

Treasury debt, which serves as a safe-haven investment in times of geopolitical and economic volatility, has been in demand since the start of the year. The 10-year Treasury yield , which moves inversely to price, has fallen 17.8 per cent since December 31.

The yield on Germany’s benchmark 10-year bund fell to -0.443 per cent, inching towards 3-1/2 month lows at -0.447 per cent set last week.

Shares overnight in Asia mostly fell. Japan’s Nikkei was off 0.6 per cent, South Korea’s KOSPI was 0.5 per cent weaker while Australia’s benchmark index eased 0.14 per cent.

China’s indexes were the only ones in the black in Asia, with the blue-chip index adding 0.4 per cent and Shanghai’s SSE Composite up 0.5 per cent.

Oil prices dipped on weaker Chinese demand due to the coronavirus and as traders waited to see if Russia would join other producers in seeking further output cuts.

Oil has dropped more than 20 per cent from a peak in January after the spreading virus hit demand in the world’s largest oil importer and fuelled concerns of excess supplies.

Brent crude slipped US$1.20 to settle at US$53.27 a barrel, while US West Texas Intermediate fell 75 cents to settle down at US$49.57 a barrel.

US gold futures settled 0.4 per cent higher at US$1,579.50 an ounce. — Reuters