Gold bars to be exempt from tariffs, White House clarifies
* Wall St stock indexes tumble; dollar rises
* Gold falls as investors need cash to cover losses
* U.S. Treasury yields fall as investors seek shelter
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Updates prices after U.S. open, adds commentary, changes
byline, previous dateline London)
By Sinéad Carew
NEW YORK, April 21 (Reuters) - Stock markets around the
world fell on Tuesday, as oil prices hit a two-decade low a day
after some U.S. crude oil futures turned negative for the first
time ever, underlining worries about deep economic damage from
the coronavirus pandemic.
While gold is often seen as a safe haven bet, that commodity
also declined on Tuesday as investors favored cash. GOL/
Investors rushed to buy bonds, which pushed down U.S.
Treasury yields, with the five-year note hitting a new record
low as the difficulties of restarting the U.S. economy sank in.
June oil futures plunged, as the panic that sent U.S. May
futures to below minus $40 per barrel on Monday intensified due
to worries about the coronavirus pandemic's effect on fuel
demand in a market overrun by supply. O/R
Equities around the world tumbled, with Wall Street's major
stock indexes following Europe and Asia lower. .N
Monday's plunge in oil, which saw some prices reach minus
$40 a barrel, resulted from growing crude stockpiles and
dwindling storage space as demand dwindled because of worldwide
lockdowns aimed at containing the spread of the virus.
U.S. crude CLc1 recently rose 104.78% to $1.80 per barrel
and Brent LCOc1 was at $20.19, down 21.04% on the day. O/R
As countries around the world keep reporting new coronavirus
cases and deaths, they have also been working on plans to reopen
economies amid signs containment efforts seemed to be working.
"Investors are feeling more comfortable about the virus
curve flattening but are coming to grips with the economic
realities," said TD Ameritrade Institutional's senior trading
strategist, Mike Turvey, noting that the fall-off of oil demand
and prices was one alarming sign along with earnings news.
With bleak news at the forefront of investors minds, Turvey
said investors ignored suggestions U.S. lawmakers were close to
agreement on a fourth coronavirus spending bill. The Dow Jones Industrial Average .DJI fell 607.41 points,
or 2.57%, to 23,043.03, the S&P 500 .SPX lost 85.63 points, or
3.03%, to 2,737.53 and the Nasdaq Composite .IXIC dropped
321.38 points, or 3.75%, to 8,239.35.
The pan-European STOXX 600 index .STOXX lost 3.19% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
2.95%.
The U.S. dollar rose against a basket of currencies as
investors sought the safety of the world's most liquid currency
in a risk averse market. The dollar later pared some gains as the session wore on.
FRX/ The dollar index =USD rose 0.214%, with the euro EUR=
up 0.01% to $1.0863. GVD/EUR
"It's definitely a risk-off day so the dollar is benefiting
from that now," said Minh Trang, senior FX trader at Silicon
Valley Bank in Santa Clara, California.
Benchmark 10-year notes US10YT=RR last rose 25/32 in price
to yield 0.5472%, from 0.626% late on Monday.
The 30-year bond US30YT=RR last rose 92/32 in price to
yield 1.1328%, from 1.235%.
Seaport Global Holdings managing director Tom di Galoma said
the trading reflected a basket of worries, including lower oil
prices and a resulting hit to stock values stemming from
wholesale closures of American cities and states.
"It's a continued flight to quality. Investors are looking
for a safety asset, and Treasuries happens to be that," di
Galoma said.
Gold prices dropped to a near two-week low while palladium
slumped 15.5% as investors scrambled for cash to cover losses in
other asset classes mainly driven by a crash in oil markets as
the coronavirus wrecks economies. "Oil has really got the entire commodity complex down with
it ... A lot of people are exiting positions that they were very
profitable on with a wait-and-see attitude to see whether
there's further spillover from the energy into precious metals,"
said Bob Haberkorn, senior market strategist at RJO Futures.
Spot gold XAU= dropped 0.8% to $1,679.76 an ounce.
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