Gold bars to be exempt from tariffs, White House clarifies
(Adds reaction to Fed rate cut)
* Federal Reserve cuts interest rates by 50 basis points
By Herbert Lash
NEW YORK, March 3 (Reuters) - Global equity markets seesawed
in volatile trade and gold prices rose more than 2% on Tuesday
after the Federal Reserve cut interest rates in an emergency
move to shield the U.S. economy from the impact of the
coronavirus.
The U.S. central bank said it was cutting rates by a half
percentage point to a target range of 1.00% to 1.25% as the
"coronavirus poses evolving risks to economic activity."
The decision to cut rates before the Fed's next scheduled
policy meeting on March 17-18 reflects the urgency with which
policymakers felt they needed to act to prevent a potential
global recession. The decision was unanimous, it said in a
statement.
Stocks on Wall Street rebounded to trade more than 1% higher
after the Fed's surprise statement. But the Dow industrials,
Nasdaq and S&P 500 later pared gains to seesaw erratically on
either side of break-even.
"It spooked investors after the strong rebound because it
was made right away and it was 50 basis points. So it was larger
than people (were expecting), and some may be thinking, 'Ooh,
are things worse than we think?'" said Alan Lancz, president of
Alan B. Lancz & Associates Inc in Toledo, Ohio.
Shares in Europe rose to trade more than 2% higher on the
day, while MSCI's all-country world index rose almost 1%.
The Group of Seven finance officials said earlier in Tokyo
they would use all appropriate policy tools to achieve strong,
sustainable global growth and safeguard against downside risks
posed by the coronavirus. Investors shrugged off the statement
as too little to confront the fast-moving virus.
The Fed's rate cut and G7 statement came after global stocks
last week suffered their worst rout in a decade on fears the
disruption to supply chains, factory output and global travel
caused by the epidemic could seriously slow the world economy.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.16% and emerging market stocks rose 1.67%.
The pan-European STOXX 600 index .STOXX rose 2.08%
The Dow Jones Industrial Average .DJI rose 91.39 points,
or 0.34%, to 26,794.71, the S&P 500 .SPX gained 18.38 points,
or 0.59%, to 3,108.61 and the Nasdaq Composite .IXIC added
60.52 points, or 0.68%, to 9,012.68.
Spot gold XAU= added 3.2% to $1,640.56 an ounce.
Coronavirus hit to the world's financial markets https://tmsnrt.rs/32LNqu6
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