Shares rise on upbeat data but COVID-19 spike dampens sentiment

NEW YORK (Reuters) – A global gauge of stock markets rose on Tuesday as investors continued to look for signs of an economic recovery while Treasury debt prices were little changed amid a fog of rising COVID-19 cases.

The possible return of Libyan oil production, which has been down to a trickle since the start of the year, weighed on crude prices.

World shares are down around 8% so far this year, having slumped 34% between Feb. 12 and March 23, but the world equity index is up 18% this quarter – on track for its biggest three-month gain since the second quarter of 2009.

U.S. consumer confidence rose more than expected in June, following upbeat real estate data on Monday.

Some traders said quarter-end flows were also supportive of stock prices. Wall Street was setting up to close the quarter with the largest gains since 1998.

“We are finishing up one of the best quarters in history, so we wouldn’t be surprised to see a little bit of window dressing taking place on the last day,” said Sal Bruno, chief investment officer at IndexIQ in New York.

The Dow Jones Industrial Average rose 79.57 points, or 0.31%, to 25,675.37, the S&P 500 gained 30.9 points, or 1.01%, to 3,084.14 and the Nasdaq Composite added 145.76 points, or 1.48%, to 10,019.91.

The pan-European STOXX 600 index rose 0.13% and MSCI’s gauge of stocks across the globe gained 0.80%.

Emerging market stocks rose 0.31%. Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.8% higher, while Japan’s Nikkei rose 1.33%.

Rising COVID-19 cases continue to show signs of a second deadly wave of the pandemic, but markets still expect a global economic recovery as lockdown measures ease.

Brent crude slipped as traders took profits from the previous session and Libya’s state oil company flagged progress in talks to resume exports, potentially boosting supply.

U.S. crude recently fell 0.23% to $39.61 per barrel and Brent was at $41.17, down 1.29% on the day.

U.S. Treasury yields were little changed even as stocks rose as investors fixated on a continued surge in U.S. coronavirus cases.

“It’s not that we’re not looking at the (economic data) numbers anymore. But if we’re getting data from May and early June, they might not matter as much if we’re seeing cases rise,” said Collin Martin, fixed income strategist at Schwab Center for Financial Research in New York.

The dollar index was in and out of negative territory as upbeat U.S. and Chinese data left traders torn between optimism about global growth and fears that a surge in new COVID-19 cases could jeopardize the rebound.

The dollar index fell 0.091%, with the euro up 0.05% to $1.1246.

The Japanese yen weakened 0.20% versus the greenback at 107.77 per dollar, while Sterling was last trading at $1.2373, up 0.63% on the day.

Beijing unveiled the national security law it is imposing on Hong Kong, punishing crimes of secession and sedition with up to life in prison, a move expected to ratchet up tensions with the United States, Britain and other Western governments.

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