GLOBAL MARKETS-U.S. stocks jump, Treasury yield curve steepens on incremental stimulus proposals

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog: LIVE/

(Updates to market close)
By Stephen Culp
NEW YORK, Oct 7 (Reuters) - U.S. stocks rebounded to close
sharply higher on Wednesday after incremental stimulus proposals
helped investors recover from the shock of President Donald
Trump's announcement on Tuesday that he would halt stimulus
talks until after the Nov. 3 election.
Increased risk appetite also resulted in weaker Treasury
prices and a steepening yield curve as markets were heartened
that at least some fiscal aid measures to help an economy
battered by the coronavirus pandemic were still on the table.
While White House Chief of Staff Mark Meadows said he was
"not optimistic for a comprehensive deal," Trump appeared to
relent somewhat, urging Congress to pass a $25 billion airline
bailout, a move also supported by U.S. House of Representatives
Speaker Nancy Pelosi. In separate Twitter posts, Trump also expressed willingness
to approve sending stand-alone $1,200 relief checks to Americans
and urged Congress to approve the $135 billion payroll
protection program for small businesses.
"Investors grow optimistic when there is any type of
stimulus, whether it's a large package or more discrete," said
Joseph Sroka, chief investment officer at NovaPoint in Atlanta.
"There's interest on both sides in having some kind of stimulus
as the election approaches."
"The most important issue for them is who gets to take
credit for it," Sroka added.
The U.S. Federal Reserve released the minutes from its
latest monetary policy meeting, which revealed many members of
the Federal Open Market Committee said their economic outlook
assumed additional fiscal support, and if a stimulus package
from Congress was too small or came later than expected, the
economic recovery could be slower than anticipated. This echoed Fed Chair Jerome Powell's warning on Tuesday
that the economic recovery would slip into a downward spiral if
Congress fails to provide additional fiscal aid. "The Fed only has so many tools they're allowed to apply to
spark an economic recovery," Sroka said. "They're very vocal
about urging the other part of the government to play its role
for the economic recovery to be successful."
The Dow Jones Industrial Average .DJI rose 530.7 points,
or 1.91%, to 28,303.46, the S&P 500 .SPX gained 58.5 points,
or 1.74%, to 3,419.45 and the Nasdaq Composite .IXIC added
210.00 points, or 1.88%, to 11,364.60.
European shares failed to join the rally in global equities,
weighed down by healthcare and blue-chip stocks. The pan-European STOXX 600 index .STOXX lost 0.12% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
1.06%.
U.S. Treasury prices fell and the yield curve steepened
after Trump urged Congress to pass the airline bailout measure
and small business aid. Benchmark 10-year notes US10YT=RR last fell 14/32 in price
to yield 0.7868%, from 0.74% late on Tuesday.
The 30-year bond US30YT=RR last fell 42/32 in price to
yield 1.5927%, from 1.537% late on Tuesday.
Pandemic aid uncertainties, along with a
bigger-than-expected rise in U.S. inventories, sent crude prices
lower. U.S. crude futures CLc1 settled at $39.95 per barrel, down
1.77%. Brent LCOcv1 fell 1.55% to settle at $41.99 per barrel
on the day.
The dollar barely moved after the Fed released its minutes,
remaining slightly down against a basket of world currencies.
The dollar index .DXY fell 0.05%, with the euro EUR= up
0.24% to $1.1762.
The Japanese yen weakened 0.35% versus the greenback at
106.02 per dollar, while sterling GBP= was last trading at
$1.2911, up 0.26% on the day.
Gold prices gained on easing fiscal aid uncertainties.
Spot gold XAU= added 0.5% to $1,886.90 an ounce.

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