By Matt Scuffham
NEW YORK (Reuters) – Global equities treaded water and the dollar slipped on Monday with Wall Street investors staying on the sidelines ahead of company earnings season while record daily coronavirus infections in Europe caused concern.
U.S. stocks fell slightly on the 33rd anniversary of the 1987 “Black Monday” crash, when the Dow Jones Industrial Average <.DJI> lost 22.6% in one day, equivalent to a drop of about 6,500 points in the index today.
Investors were waiting to see how large companies due to report later in the week such as Netflix <NFLX.O> and Tesla <TSLA.O> fared in the latest quarter before committing funds, said Dennis Dick, a trader at Bright Trading LLC.
“I think markets are going to lack direction for a couple of days until we get some clarity for how these earnings are going to look,” he said.
Investors are also waiting to see whether the final debate between US President Donald Trump and his Democratic challenger Joe Biden will shift the trajectory of the election.
Even news of potential progress towards a COVID-19 vaccine was only having a muted impact. Drugmaker Pfizer Inc <PFE.N> said on Friday it could have a coronavirus vaccine ready in the United States by the end of this year.
“The market is becoming numb to it to a certain extent because we’re getting vaccine headlines every other day,” said Dick.
The Dow Jones Industrial Average .DJI was down 100.05 points, or 0.35%, at 28,506.26, the S&P 500 .SPX was down 15.01 points, or 0.43%, at 3,468.80. The Nasdaq Composite .IXIC was down 36.10 points, or 0.31%, at 11,635.45.
The dollar edged lower as investors revived bets that an agreement in Washington on a fiscal stimulus package could be reached ahead of the upcoming U.S. election.
The move out of the safe-haven greenback came after House Speaker Nancy Pelosi said that, while differences remained with President Donald Trump’s administration on a wide-ranging coronavirus relief package, she believed legislation could be pushed through before Election Day.
With investors’ risk appetite rising, the dollar index <=USD> was down 0.41%, giving back some of its 0.7% rise from last week when a global surge in coronavirus cases and an impasse over the stimulus package stoked caution.
Gold rose as the dollar retreated and expectations for a stimulus deal bolstered bullion’s appeal as an inflation hedge. Oil futures fell on Libya’s plan to boost output.
European shares closed lower as surging COVID-19 cases raised the possibility of further economic restrictions.
Parts of the UK were put into lockdown and France imposed curfews.
The pan-European STOXX 600 index .STOXX closed down 0.3%.
Trading volumes in Europe were sharply lower due to a technical glitch at exchange operator Euronext, which led to trading activity being halted in the Amsterdam, Brussels, Lisbon and Paris bourses.
In Asia, investors took comfort from China’s third-quarter economic recovery as consumers shook off their coronavirus caution.
MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.5% for a second straight day of gains, paring back following third-quarter gross domestic product data from China.
In currency markets, sterling rose after the European Union said it is ready to intensify talks towards a deal on future trade ties with Britain. Sterling rallied back to near $1.30 levels against the dollar on Monday, up 0.5% at $1.2980 while the euro <EUR=> meanwhile traded 0.3% higher at $1.1756.
The yuan reached a fresh 1-1/2-year high against the dollar, while the U.S. dollar <=USD> slipped 0.4% to 93.295 against a basket of six major currencies. [USD/]
Spot gold XAU= rose 0.4% to $1,906.36 per ounce. U.S. gold futures GCv1 settled up 0.3% to $1,911.70.
Brent crude LCOc1 futures fell 0.7% to $42.62 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures settling 0.1% lower at $40.83 per barrel.
(Additional reporting by Swati Pandey in Sydney and Thyagaraju Adinarayan in London, editing by Chizu Nomiyama and Nick Zieminski)
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