(Corrects typo in paragraph 2.)
* Pompeo says 'significant evidence' virus emerged from lab
* Dollar, gold rise on new trade tensions
* Global equity markets fall; oil prices rise
By Herbert Lash
NEW YORK, May 4 (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 dumped stakes in major U.S.
airlines, but they pared losses as the market rebounded.
Shares of Delta Air Lines Inc DAL.N , American Airlines
Group Inc AAL.O , Southwest Airlines Co LUV.N and United
Airlines Holdings Inc UAL.O 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 JPY= 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 GCcv1 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.
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%.
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