(New throughout, updates prices, market activity and comments
to close of U.S. markets)
* China push to remove recent U.S. tariffs seen as positive
* Dow, Nasdaq close at new record highs; MSCI index pauses
* Bond yields rising globally as recession fears recede
* Oil prices gain on trade optimism, economic data
By Herbert Lash
NEW YORK, Nov 5 (Reuters) - The U.S. dollar and crude prices
rose on Tuesday, spurred by optimism that a U.S.-China trade
deal may be near, but a rally in global equity markets paused
after China pressed U.S. President Donald Trump to remove
recently imposed tariffs.
MSCI's gauge of global stock markets set a 21-month intraday
high but pared gains to close lower while the Nasdaq and Dow
Jones industrial average eked out record closing highs.
U.S. and European government bond yields climbed on trade
hopes and upbeat economic data. China's push to remove more U.S.
tariffs imposed in September as part of a "phase one" trade deal
mostly boosted optimism.
"You're seeing a continuation of optimism around a potential
trade agreement to come with China as referenced by the
potential removal of tariffs in December," said Michael James,
managing director of equity trading at Wedbush Securities in Los
Angeles. "It's just another leg towards a potential agreement."
A trade deal is far from certain, Fawad Razaqzada, technical
analyst at FOREX.com, said in an investor note. "If the talks
collapse, then so too could the markets," he said.
Solid corporate earnings and upbeat data gave equities a
lift. More than three-quarters of the S&P 500 companies that
have reported so far have beaten profit expectations, Refinitiv
data showed.
ISM's services data showed a reading of 54.7 in October from
52.6 the prior month, exceeding expectations of economists
polled by Reuters for 53.4. It was the latest data to ease
concerns the U.S. economy.
MSCI's gauge of stock indexes in 47 countries
.MIWD00000PUS edged lower by 0.01%. The pan-European STOXX 600
index of small, mid-sized and large stocks .STOXX and the
FTSEurofirst 300 index .FTEU3 of leading regional shares both
rose 0.2%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
30.52 points, or 0.11%, to 27,492.63. The S&P 500 .SPX lost
3.65 points, or 0.12%, to 3,074.62 and the Nasdaq Composite
.IXIC added 1.48 points, or 0.02%, to 8,434.68.
In Asia, optimism was fueled by the People's Bank of China's
first cut in its medium-term lending rate since early 2016. It
was only a token 5 basis points to 3.25%, but it underscored
Beijing's desire to support the economy.
Oil prices rose more than 1% on trade hopes. O/R Oil was
also supported when OPEC Secretary-General Mohammad Barkindo
said the market outlook for 2020 may be brighter than forecast,
appearing to downplay any need for deeper production cuts.
Brent crude LCOc1 futures for January delivery settled 83
cents higher at $62.96 a barrel. U.S. West Texas Intermediate
(WTI) crude CLc1 futures rose 69 cents to settle at $57.23 a
barrel.
The safe-haven yen and Swiss franc slid. Gold fell almost
2%, en route to its biggest daily slide in over a month. GOL/
The dollar index .DXY rose 0.43%, with the euro EUR=
down 0.48% to $1.1073. The Japanese yen JPY= weakened 0.52%
versus the greenback at 109.16 per dollar.
U.S. gold futures GCcv1 settled down 1.8% at $1,483.70.
Benchmark 10-year U.S. Treasury notes US10YT=RR fell 19/32
in price to yield 1.8548%. That boosted financial stocks. The
S&P financial sector .SPSY was the second-biggest gainer of
the 11 sectors, edged out by the rising energy sector .SPNY .
A steady rise in bond yields has been a big tailwind for
financial stocks and one of the biggest contributors to the
continued strength in equities, James said.
"Outside some significant macroeconomic downside shock, the
market continues to reluctantly trade higher," he said.
The 10-year U.S. Treasury barely yielded 1.5% in early
October.
Germany's 10-year bond yield rose as high as -0.308%
DE10YT=RR , while the French 10-year hit -0.006% FR10YT=RR to
within striking distance of positive territory.
U.S. non-manufacturers ISM index https://tmsnrt.rs/2JMLMjB
World stocks surge $10 in 2019 https://tmsnrt.rs/2JRIM5J
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