(Adds close of U.S. markets)
* Wall Street soars as bull market rally resumes
* Coronavirus death toll in China rises to 361
* China central bank injects $174 bln of liquidity
* Oil slumps to lows last seen in January 2019
* Yields rise, gold slips as safe-havens lose appeal
By Herbert Lash
NEW YORK, Feb 3 (Reuters) - The dollar strengthened and a
gauge of global stocks jumped on Monday, lifted by an unexpected
rebound in U.S. manufacturing that helped temper fears that
caused stocks overnight in Asia to plunge on the potential
impact of the coronavirus in China.
Gold fell 1%, retreating from a four-week high, as China's
efforts to protect its economy from the virus and the injection
of 1.2 trillion yuan ($174 billion) worth of liquidity into the
markets helped stem inflows into safe-haven assets. Bond yields rose, while the Japanese yen and Swiss franc
retreated as risk sentiment improved despite a rising infection
rate and death toll from the outbreak.
Deaths rose to 361 as of Sunday, up 57 from the previous
day, China's National Health Commission said. All deaths have
occurred in China, with the exception of a Chinese man who died
in the Philippines after traveling from Wuhan, the epicenter of
the outbreak. Oil prices fell about 3%, however, on concerns crude demand
from China will take a hit, though the possibility of deeper
output cuts by the Organization of the Petroleum Exporting
Countries and its allies offered some price support.
Shares in China plunged during the first day of trading
since China closed equity, currency and bond markets on Jan. 23
for the Lunar New Year, a break that was extended by the
government because of the coronavirus. The Shanghai Composite index .SSEC fell 7.7%, slicing $420
billion in value from the benchmark, and the yuan opened at its
weakest level this year, sliding past 7 per dollar CNY= .
Japan's Nikkei .N225 dropped 1% to the lowest since
November and Australia's benchmark index .AXJO fell 1.3%.
Shares edged higher in Europe on relief the UK finally
exited the European Union, while U.S. stocks advanced as data
showed factory activity unexpectedly rebounded in January after
contracting for five straight months amid a surge in new orders.
The Institute for Supply Management (ISM) said its index of
U.S. manufacturing rose to 50.9 last month, the highest since
July, from an upwardly revised 47.8 in December. A reading above 50 indicates expansion in the manufacturing
sector, which accounts for 11% of the U.S. economy.
Joseph LaVorgna, chief economist for the Americas at French
bank Natixis in New York, said he was bullish on the U.S.
economic outlook and that capital expenditures by corporations
should pick up.
"The ISM helped. It was better than expected. We're still in
a bull market, there's still a buy-the-dip mentality," LaVorgna
said, though he acknowledged "the coronavirus can still play
havoc; you got to be worried."
Karl Schamotta, chief market strategist at Cambridge Global
Payments in Toronto, said traders were bargain-hunting in
anticipation of stimulus from the Chinese government.
"Traders are looking for value where they can," he said.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.31% and its emerging market index lost 0.14%.
The pan-European STOXX 600 index .STOXX rose 0.25%.
The major Wall Street indexes advanced in a broad rally.
The Dow Jones Industrial Average .DJI rose 143.78 points,
or 0.51%, to 28,399.81. The S&P 500 .SPX gained 23.4 points,
or 0.73%, to 3,248.92 and the Nasdaq Composite .IXIC added
122.47 points, or 1.34%, to 9,273.40.
The pound GBP= slid after British Prime Minister Boris
Johnson set out tough terms for EU talks, rekindling fears
Britain would reach the end of an 11-month transition period
without reaching a trade deal. Sterling GBP= traded at $1.2993, down 1.56% on the day and
the dollar index .DXY rose 0.45%.
The euro EUR= down 0.31% to $1.1059, while the yen
weakened 0.26% versus the greenback at 108.69 per dollar.
Benchmark 10-year notes US10YT=RR last fell 2/32 in price
to lift their yield to 1.5238%. Oil prices fell. Brent crude LCOc1 fell $2.17 to settle at
$54.45 a barrel, while U.S. West Texas Intermediate (WTI) crude
CLc1 fell $1.45 to settle at $50.11 a barrel. Both the global
and U.S. benchmarks traded at lows last seen in January 2019.
Spot gold XAU= , which posted its best month in five in
January, slid 0.85% to $1,576.30 an ounce. U.S. gold futures
GCv1 settled 0.3% lower at $1,582.40.
GRAPHIC-World FX rates http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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