Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Global shares fall on U.S.-Sino spat but Wall Street rebounds

Stock MarketsMay 05, 2020 03:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
11/11 © Reuters. Outbreak of the coronavirus disease (COVID-19) in London 2/11

By Herbert Lash

NEW YORK (Reuters) - The dollar rose on risk aversion and global stock markets fell on Monday as U.S.-Chinese bickering over the origin of the coronavirus outbreak sparked fear of a new trade war, but Wall Street rebounded as the lifting of lockdowns in some U.S. states boosted optimism.

U.S. stocks rallied at the end of the session, with the Nasdaq gaining more than 1 percent, as hard-hit New York became the latest state to announce a phased reopening of business activity, starting with select industries.

"The key turnaround this afternoon stemmed from (the) California governor's optimistic tone," said Edward Moya, senior market analyst at OANDA. "Some regional openings in California helped financial markets end the day on a positive note."

"People want to believe that things are going to get better," said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey. "All these announcements of state plans to reopen has given some optimism to investors that things can only improve from here."

Oil prices jumped higher after settlement prices showed modest gains, but the strengthening safe-haven dollar and gold held their ground.

A rise in risk aversion came as business surveys showed Asian and European factory activity in April fell deeper into contraction, adding to a dismal outlook as government lockdowns to contain the pandemic froze global production and slashed demand.

U.S. Secretary of State Mike Pompeo on Sunday said there was "a significant amount of evidence" that the coronavirus emerged from a Chinese laboratory, remarks that rattled investors though he did not dispute U.S. intelligence agencies' conclusion that it was not manmade.

An editorial in China's Global Times said he was "bluffing" and called on the United States to present its evidence.

"The headlines of further tariffs and supply-chain disruptions come at a time where global growth expectations are already fragile," said Simon Harvey, currency analyst at broker Monex Europe.

New orders for U.S.-made goods suffered a record decline in March and could sink further as pandemic-related disruptions fracture supply chains and depress exports, the Commerce Department said in a series of increasingly bleak economic data reports.

IHS Markit's final manufacturing PMI for the euro zone sank to 33.4, its lowest since the survey began in mid-1997 and far below the 50-point line dividing growth from contraction.

The pan-European STOXX 600 index (STOXX) closed down 2.65%, while MSCI's gauge of stocks across the globe (MIWD00000PUS) shed 0.66%.

Wall Street rose after the Dow industrials and S&P 500 traded lower almost the entire session.

The Dow Jones Industrial Average (DJI) rose 26.07 points, or 0.11%, to 23,749.76. The S&P 500 (SPX) gained 12.03 points, or 0.42%, to 2,842.74 and the Nasdaq Composite (IXIC) added 105.77 points, or 1.23%, to 8,710.72.

The Nasdaq moved the most.

"If you're going to buy this market, psychologically you want to buy the companies that you think can really do well," Meckler said. "This has been a very hard market to bottom fish in, to buy the wounded names."

Airline stocks got hammered after billionaire Warren Buffett's Berkshire Hathaway (NYSE:BRKa) dumped stakes in major U.S. airlines, but they pared losses as the market rebounded.

Shares of Delta Air Lines Inc (N:DAL), American Airlines Group Inc (O:AAL), Southwest Airlines Co (N:LUV) and United Airlines Holdings Inc (O:UAL) fell between 5.1% and 7.7%, as Buffett said "the world has changed" for the aviation industry.

Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 2.5%, pulled down by the Hang Seng (HSI) in Hong Kong.

The dollar rose against most major currencies. The dollar index (=USD) rose 0.288%, with the euro (EUR=) down 0.76% to $1.0899.

The Japanese yen strengthened 0.25% versus the greenback at 106.72 per dollar.

Gold rose as the U.S.-China tensions over the coronavirus outbreak kindled fears of a new trade war, leading investors to seek safe havens.

U.S. gold futures settled 0.7% higher at $1,713.30 an ounce.

Simon Black, head of investment management at wealth management firm Dolfin, said investors were also adjusting their forecasts for the depth of the economic damage the pandemic will inflict.

"It's also the economic reality sinking in," he said, adding that a rebound by global equities of over 20% from lows hit in March was not likely to be sustainable.

Graphic: Rebound ,

Global coronavirus cases have surpassed 3.5 million and deaths have neared a quarter of a million, according to a Reuters tally.

Brent crude futures (LCOc1) rose 76 cents to settle up at $27.20 a barrel, while U.S. crude futures (CLc1) added 61 cents to settle at $20.39 a barrel. U.S. WTI later added about $1 a barrel, and Brent almost the same.

Benchmark 10-year notes (US10YT=RR) last rose 4/32 in price to yield 0.6289%.

(This story refiles to correct typo in paragraph 2)

Global shares fall on U.S.-Sino spat but Wall Street rebounds

Related Articles

Asian Stocks Up, China Releases Latest Economic Data
Asian Stocks Up, China Releases Latest Economic Data By - Jan 17, 2022 1

By Gina Lee – Asia Pacific stocks were mostly up on Monday morning, with investors digesting the latest economic data from China and what further steps the country...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Daniel LANSADE May 04, 2020 6:57
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Trump is the most irresponsible and unfit president in all the history of this great country. He lies, he asserts without any single proof, he does not recognise his total responsability for his poor judgements about this pandemic and the devastated results of several thousands of deaths. Please Americans, kick him out in November
Yelen Shim
Yelen Shim May 04, 2020 6:57
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I doubt they will. They're ignorant bunch of cowboys.
David Hawley
David Hawley May 04, 2020 6:11
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just like Trump, to blame someone else for his shortcomings. The stock market is down, that's all he cares about. So he threatens tariffs again on someone else for causing it. He tries to talk it up by being confident there will be a vaccine by the end of the year..just in time for the elections..without any proof from scientists there will be. Trump is the soul cause of ill feeling in the world his daily tweets and big language. Worse president ever.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email