Equities dip, safe havens rise as virus cases surge

NEW YORK (Reuters) – Global equity benchmarks edged lower Thursday as investors gauged the potential economic impact of a surge in U.S. coronavirus cases, while perceived safe haven assets including U.S. Treasuries and the dollar rose.

In the United States, Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday and Australia posted its biggest daily rise in two months.

The governors of New York, New Jersey and Connecticut ordered travelers from eight other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions.

Disney has delayed the re-opening of theme parks and resorts in California, and Texas is facing a “massive outbreak” and considering new localized restrictions, its governor said.

After a white-hot few months for markets that has seen world stocks rebound nearly 40%, nervousness about the impact of COVID-19 was rising again.

“There is a little bit of reality bites coming,” said Damian Rooney, senior institutional salesman at stockbroker Argonaut in Perth. “I don’t think there was a particular straw that broke the camel’s back, but people are a little bit twitchy.”

MSCI’s gauge of stocks across the globe shed 0.40% following modest gains in Europe led by Germany, which reported rising consumer confidence.

In morning trading on Wall Street, the Dow Jones Industrial Average fell 84.5 points, or 0.33%, to 25,361.44, the S&P 500 lost 4.06 points, or 0.13%, to 3,046.27 and the Nasdaq Composite added 10.09 points, or 0.1%, to 9,919.25.

Weekly jobless claims data showed weak demand is forcing U.S. employers to lay off workers, even as businesses reopen. Claims totaled a seasonally adjusted 1.480 million for the week ended June 20 and although down from 1.540 million the prior week, it was higher than the 1.3 million a Reuters poll had expected.

“During the swift rebound since the March lows, equity markets may have gotten a little ahead of themselves,” wealth manager DWS said in a quarterly Chief Investment Officer report.

Concerns about lingering economic damage from the coronavirus pandemic helped bolster the dollar and government bonds.

The dollar index rose 0.203%, with the euro down 0.34% to $1.1212. Benchmark 10-year notes last rose 7/32 in price to yield 0.661%, from 0.684% late on Wednesday.

Gold hovered around $1,757 an ounce [GOL/].

U.S. crude recently fell 0.11% to $37.97 per barrel and Brent was at $40.22, down 0.22% on the day.

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