NEW YORK (Reuters) – Global equity markets edged higher on Wednesday on strong results from Apple and others but concerns about the coronavirus outbreak in China kept a safe-haven bid in gold and the dollar alive.
The yield on benchmark U.S. Treasuries and German bunds fell as the United States and Japan evacuated their nationals from the virus’ epicenter. The death toll from the virus rose by 27 to 133, and another 1,459 cases were confirmed.
A Chinese government economist said the outbreak could cut China’s first quarter growth by one point to 5% or lower as the crisis hits sectors from mining to luxury goods.
Investors took in stride the Federal Reserve’s first policy meeting of the year as it left interest rates unchanged. Officials pointed to continued moderate U.S. economic growth and a “strong” job market.
Treasury yields were little changed after the Fed released a statement. Benchmark U.S. stock indexes ticked up to the day’s highs before paring the bump, while the dollar held on to its gains against the euro and yen.
Since the Fed cut rates in October, policymakers have kept their target rate in a range of 1.50% and 1.75%.
Strong results from Santander helped bank stocks in Europe as gains in Apple and Boeing lifted shares on Wall Street, but a spate of disappointing results from AT&T and Advanced Micro Devices Inc , among others, weighed on equities.
“You have to still continue to get good earnings, which we are, they’re good, but they’re going to have to be really good,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
“The virus certainly is on people’s mind. People think it’s a temporary thing, it’s certainly something that could get worse before it gets better,” he said. “That is not priced into the market right now.”
MSCI’s gauge of stocks across the globe gained 0.29% as emerging market stocks lost 0.34%. Mexico’s bolsa index bucked the downdraft in emerging markets, rising about 1%.
U.S. President Donald Trump signed a new trade agreement with Canada and Mexico into law on Wednesday, replacing the 26-year-old North American Free Trade Agreement.
The pan-European STOXX 600 index rose 0.44%, with the euro zone banks index gaining 1%.
Santander posted higher quarterly net profit, boosted by a solid underlying performance in Brazil and capital gains. Santander rose 4.4%.
Apple Inc gained 2.9% after reporting earnings for the holiday shopping quarter above analysts’ expectations, even as it braced for more supply disruptions in virus-hit China.
The Dow Jones Industrial Average rose 120.42 points, or 0.42%, to 28,843.27. The S&P 500 gained 10.72 points, or 0.33%, to 3,286.96 and the Nasdaq Composite added 46.08 points, or 0.5%, to 9,315.76.
Spot gold prices rose as concerns about economic growth due to the coronavirus buoyed safe-haven demand, but U.S. gold futures settled little changed at $1,570.40 per ounce.
Oil was mixed as worries both about the coronavirus and swelling U.S. crude inventories weighed on prices. Talk that the Organization of the Petroleum Exporting Countries could extend crude output cuts provided support.
Brent crude gained 30 cents to settle at $59.81 at barrel, while U.S. crude fell 15 cents to settle at $53.33.
Traders Anthony Rinaldi (L) and Federico DeMarco (R) work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 28, 2020. REUTERS/Bryan R Smith Demand strengthened for the dollar index and the safe-haven Japanese yen firmed modestly. A risk-off tone returned to currency markets amid uncertainty about coronavirus.
The dollar index fell 0.01%, with the euro down 0.04% to $1.1016. The yen strengthened 0.07% versus the greenback at 109.10 per dollar.
Benchmark 10-year U.S. Treasury notes rose 14/32 in price to push down its yield to 1.5925%.
Reporting by Herbert Lash; Editing by Tom Brown
LINK ORIGINAL: Reuters