NEW YORK (Reuters) – Global stock markets edged higher on Tuesday as investors assessed the economic damage from the coronavirus pandemic, while the MSCI benchmark of world equities was on pace to finish its worst quarter since the financial crisis of 2008.
Stocks have rallied since the start of last week but remain down more than 20% since the start of the year. European equities finished their worst three months since 2002, while Britain’s FTSE index posted its largest quarterly drop since 1987.
The U.S. benchmark S&P 500 is set for its worst first quarter since 1938.
MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.64% following modest gains in Europe and steep declines in Asia. The index is down 21% for the quarter.
In mid-day trading on Wall Street, the Dow Jones Industrial Average .DJI rose 84.68 points, or 0.38%, to 22,412.16, the S&P 500 .SPX gained 7.59 points, or 0.29%, to 2,634.24 and the Nasdaq Composite .IXIC added 54.03 points, or 0.69%, to 7,828.18.
The Dow had been down by more than 200 points earlier in the day, suggesting that some investors were bargain-hunting or were rebalancing their portfolios at quarter’s end.
“Stocks have been on a wild ride … (and) not surprisingly, investors are split on whether to lean into or fade the current rally,” said Jonathan Golub, chief U.S. equity strategist at Credit Suisse Securities in New York.
The number of coronavirus infections globally is heading toward 800,000. Deutsche Bank analysts noted, however, that for two consecutive days, the global growth in new cases was below 10%, after exceeding that for most of the past two weeks.
Health officials are much more cautious. A World Health Organization official warned on Tuesday that even in the Asia-Pacific region, the epidemic was “far from over.”
Government bond yields rose slightly, with U.S. benchmark 10-year notes US10YT=RR down 5/32 in price to yield 0.6852%, from 0.671% late on Monday.
“In spite of the significant sell-off of most growth-oriented assets since mid-February, we are concerned there is further downside ahead,” said Salman Baig, an investment manager at Unigestion.
“The violent market action should not be understated, but the underlying cause – an accelerating pandemic requiring large parts of the economy to shut down – is still with us.”
Oil prices rose off the 18-year lows hit on Monday after the United States and Russia agreed to talks to stabilize energy markets.
Crude prices have been hit by a double whammy, with U.S. crude at one point falling below $20 a barrel on Monday, as a results of the virus outbreak cutting demand worldwide and Saudi Arabia’s price war with Russia.
Brent crude LCOc1 was up 65 cents, or 2.86%, at $23.41 a barrel, after closing on Monday at $22.76, its lowest finish since November 2002. nL4N2BO131
U.S. crude Clc1 climbed 5.6%, to $21.38 a barrel, after closing Monday at $20.09, its lowest since February 2002.
The dollar, measured against a basket of currencies, strengthened 0.4% to 99.652 =USD.
Reporting by David Randall; Editing by Bernadette Baum and Dan Grebler