GLOBAL MARKETS-U.S. stocks rise, dollar falls, as stimulus hopes revive

(Updates prices, market activity, comment, adds pix and
graphics)
* Stimulus hopes boost U.S. stocks
* Dow Jones Industrial Average up 0.9%; S&P 500 up 1.0%
* European indexes hit by new Covid restrictions
* Gold higher, dollar falls for second day

By Matt Scuffham
NEW YORK, Oct 20 (Reuters) - U.S. equities rallied on
Tuesday, fed by investor optimism that a deal would be agreed in
Washington to provide new relief measures and help the U.S.
economy withstand the impact of the coronavirus pandemic.
Gold edged higher and the dollar weakened as hopes for a
U.S. coronavirus aid package ahead of the presidential election
boosted bullion's appeal as an inflation hedge.
President Donald Trump on Tuesday pushed for a comprehensive
COVID-19 relief package, saying he would accept a deal worth
more than $2.2 trillion despite opposition to large spending
measures among his fellow Republicans in the U.S. Senate.
Trump spoke as talks between House of Representatives
Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin
approached a Tuesday deadline for reaching a bipartisan deal
that could pass Congress before Election Day on Nov. 3.
"I think there's still that belief that stimulus is going to
happen," said Ed Moya, senior market analyst at OANDA, adding
that he remained skeptical.
The Dow Jones Industrial Average .DJI was up 249.70
points, or 0.89%, at 28,445.12 and the S&P 500 .SPX was up
33.38 points, or 0.97%, at 3,460.30. The Nasdaq Composite
.IXIC was up 98.53 points, or 0.86%, at 11,577.41.
Shares in Procter & Gamble Co rose 2% as coronavirus-driven
home cleaning pushed sales of the consumer goods giant's home
care products as much as 30% higher. European stocks fell as worries about coronavirus curbs and
Brexit countered optimism generated by strong earnings,
including from Swiss bank UBS. Italy, Spain and Britain imposed curbs to limit the spread
of new coronavirus cases that threaten to derail a budding
economic recovery. The latest curbs in Ireland will see GDP fall
by 3.5% this year, Finance Minister Paschal Donohoe said.
The pan-region STOXX 600 .STOXX has recovered about 35%
from a pandemic-panic plunge in March, but is struggling to
reach pre-crisis levels, plateauing as the second-wave of the
disease grips. On Tuesday, the index closed down 0.35%.
The European Union and Britain struggled to make progress on
a trade deal to avoid a fast-approaching disruptive finale to
the five-year drama of Britain's departure from the EU.
Sterling rose against the dollar but fell versus the strong
euro, with investors still searching for clues on how likely it
was that Britain would reach a trade deal with the European
Union by the end of the year.
The British government has said it sees no basis to restart
the talks with the European Union unless there is a fundamental
change in approach. The pound was up 0.2% at $1.2968 GBP=D3 , while against the
euro it was down 0.4% at 91.26 pence EURGBP=D3 , having slipped
earlier to a two-week low of 91.48 pence.
The dollar dipped, but moves were muted as investors awaited
the outcome of stimulus talks.
The dollar index =USD declined 0.31%, putting it on track
for a second day of declines.
Spot gold XAU= rose 0.4% to $1,912.71 per ounce. U.S. gold
futures GCv1 settled up 0.2% at $1,915.40.
Oil edged up on stimulus hopes, but the threat to demand
from rising coronavirus cases worldwide and increased Libyan
output kept prices from moving higher.
Brent crude LCOc1 futures settled up 1.15% at $43.11 a
barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures
settled 1.54% higher at $41.46 a barrel.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS dropped 0.2%, while Australian
.AXJO and Japanese .N225 markets dipped.

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(Editing by Jonathan Oatis and Nick Zieminski)