NEW YORK, Oct 21 — US equities rallied yesterday, fed by investor optimism that a deal would be reached in Washington to provide new relief measures and help the US economy withstand the impact of the coronavirus pandemic.
Gold edged higher and the dollar weakened as hopes for a US coronavirus aid package ahead of the presidential election boosted bullion’s appeal as an inflation hedge.
President Donald Trump yesterday pushed for a comprehensive Covid-19 relief package, saying he would accept a deal worth more than US$2.2 trillion (RM9.13 trillion) despite opposition to large spending measures among his fellow Republicans in the US 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 November 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 was up 113.37 points, or 0.40 per cent, at 28,308.79 and the S&P 500 was up 16.20 points, or 0.47 per cent, at 3,443.12. The Nasdaq Composite rose 37.51 points, or 0.33 per cent, to 11,516.49.
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 per cent this year, Finance Minister Paschal Donohoe said.
The pan-region STOXX 600 has recovered about 35 per cent from a pandemic-panic plunge in March, but is struggling to reach pre-crisis levels, plateauing as the second wave of the disease grips. Yesterday, the index closed down 0.35 per cent.
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.
The British pound 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 EU by the end of the year.
The British government has said it sees no basis to restart the talks with the EU unless there is a fundamental change in approach.
The pound was up 0.2 per cent at US$1.2968, while against the euro it was down 0.4 per cent 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 declined 0.31 per cent, putting it on track for a second day of declines.
Spot gold rose 0.4 per cent to US$1,912.71 per ounce. US gold futures settled up 0.2 per cent at US$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 per cent at US$43.11 a barrel. US West Texas Intermediate (WTI) crude futures settled 1.54 per cent higher at US$41.46 a barrel.
Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.2 per cent, while Australian and Japanese markets dipped. — Reuters
