GLOBAL MARKETS-Pfizer vaccine hopes lift world stocks; dollar, gold on the defensive

(Updates prices, adds context)
By Koh Gui Qing
NEW YORK, Oct 16 (Reuters) - Global shares rose on Friday
while safe-havens such as the dollar softened as investors
welcomed news that drugmaker Pfizer Inc PFE.N could have a
coronavirus vaccine ready in the United States by the end of
this year.
But concerns that a teetering recovery in the world economy
could be scuttled by a resurgence in the COVID-19 pandemic in
parts of Europe and the United States kept oil prices under
pressure, and 10-year German bond yields near seven-month lows.
The S&P 500 .SPX was up 20 points, or 0.6%, at 3,503.63,
while the Dow Jones Industrial Average .DJI jumped 253 points,
or 0.9%, to 28,744.49. The Nasdaq Composite .IXIC climbed 43
points, or 0.3%, to 11,753.53.
Shares of Pfizer added 3.1%. The U.S. drugmaker said on
Friday it could file for U.S. authorization of the COVID-19
vaccine it is developing with German partner BioNTech 22UAy.F
as early as late November. As the global race to develop a coronavirus vaccine heats
up, financial markets have tracked every twist and turn, hoping
a successful deployment would hoist the world economy into a
sustained rebound after a harrowing shutdown in the spring.
Some analysts say investors are now trying to look past the
near-term ups and downs that accompany the development of a
vaccine to focus on a likelier turnaround in 2021.
"There is a general consensus that things will be better
next year," said Rick Meckler, a partner at Cherry Lane
Investments, a family investment office in New Jersey. "We go
back and forth, but people are somewhat hopeful."
The cautious optimism also benefited European shares. The
pan-European STOXX 600 .STOXX jumped 1.3%, while shares in
London .FTSE , Frankfurt .GDAXI and Paris .FCHI climbed
between 1.5% to 2%.
For the year, however, European shares have lagged the
performances of U.S. and Asian stocks.
The pan-European STOXX 600 is down 11.6% so far this year,
compared to an 8.3% gain in the S&P 500 and a 5.2% rise in
MSCI's broadest index of Asia-Pacific shares outside Japan.
Asian shares also managed to notch modest gains on Friday,
even though shares in China and Japan posted slim declines. The
MSCI Asia-Pacific share index .MIAPJ0000PUS rose 0.4%, while
Japan's Nikkei .N225 lost 0.4%.
Chinese stocks .CSI300 edged down 0.2%, but the main stock
index was up for the week for the third consecutive week.
The improved mood on trading floors dented the U.S. dollar,
usually perceived as a safe-haven asset. The dollar =USD
slipped 0.1% to 93.714 against a basket of six major currencies.
USD/
A softer dollar helped the euro EUR=EBS regain some
ground, with the common currency rising 0.1% to $1.1717.
Sterling was on the defensive after UK Prime Minister Boris
Johnson told businesses to get ready for a no-deal Brexit in
case negotiations with the European Union fail to produce a free
trade agreement. But assurances that Britain would continue to talk to
European Union representatives early next week fed hopes that a
deal could be reached. That gave sterling GBP=D3
some reprieve, and it pared earlier losses to be up 0.1% at
$1.2906.
Still, in a sign that the world economy is not out of the
woods and investors are not unanimously upbeat about the
outlook, oil prices fell on concerns that the spike in COVID-19
cases in Europe and the United States will curtail demand in two
of the world's biggest fuel-consuming regions.
"It's a tug-of-war between risks that are well-flagged, the
pandemic, the U.S. election, Brexit, and at the same time hope
that these same risks can be resolved in matter of weeks or
months", said Emmanuel Cau, head of European equity strategy at
Barclays.
Brent crude futures for December LCOc1 fell 0.6% to $42.91
a barrel and U.S. West Texas Intermediate crude futures for
November delivery CLc1 slid 0.4% to $40.8. O/R
Also exposing market angst, Germany's 10-year bond yield
DE10YT=RR posted its biggest weekly drop since August and was
hovering near a seven-month low of -0.63%. Indeed, the demand for safe-haven government bonds is so
robust that about 69% of the euro government bond market - worth
just over 6 trillion euros - had negative yields in September,
according to data from Tradeweb, a financial services company.
The 10-year U.S. Treasury yield US10YT=RR edged up to
0.7406% on Friday as investors took comfort in data that showed
U.S. retail sales rose more than expected in September, ignoring
an outlook that analysts say is threatened by pervasive
unemployment, and a lack of imminent fiscal stimulus. US/
Many investors now expect the U.S. government to only unveil
additional fiscal stimulus after the Nov. 3 election.
Dimming prospects for a near-term U.S. stimulus, and the
slight pull-back from safe-haven assets weighed on gold. Gold is
seen as a hedge against inflation and has benefited from the
loosening of global monetary and fiscal policies.
The price of spot gold XAU= dipped 0.3% to $1,901.61 per
ounce. GOL/

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