USA stocks advanced following steep losses Friday as investors monitored the worldwide response to the coronavirus outbreak.
The Dow Jones Industrial Average slumped Friday, closing 603 points lower amid fears of the Coronavirus outbreak in China. Shares fluctuated in Hong Kong, which suspended 10 out of 13 border checkpoints with China.
For Chris Weston, a Sydney-based strategist at broker Pepperston, "the big unknown" was how China's financial markets respond to the show of force from the country's central bank. Major global airlines have suspended flights to mainland China.
Investors shifted gears on Monday after global equities sank in their worst week since August on concern economies will falter as the virus spreads. On Monday the People's Bank of China cut the interest rate it charges banks for short-term funding. Still, the economic toll is becoming clearer, with Beijing reportedly evaluating whether its growth target this year should be softened. Readings above 50 indicate activity is expanding across the manufacturing sector, while those below 50 signal contraction.
"It continues to be just a big unknown, but the US goes into this with accelerating growth".
"We spent most of this week still with this kind of euphoric optimism about the United States market, and today that finally began to fade... people are finally starting to get concerned", said Michael O'Rourke, chief market strategist at JonesTrading in Stamford, Connecticut. "Typically these things don't last forever". Almost 18% of its revenue last quarter came from China. Copper futures dropped again in London.
Google parent Alphabet will report earnings later Monday, while Ford and Disney release results on Tuesday.
Friday has the US employment report for January. The S&P 500 rose 0.7%, to 3,248.92.
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The NASDAQ hiked 122.47 points, or 1.3%, to 9,273.40.
The pan-European Stoxx Europe 600 gained 0.2%.
"The balance between deleveraging and growth is likely to be tilted towards stimulus in order to make up ground lost due to the virus and quarantine", said Larry Brainard, the chairman for emerging markets at TS Lombard, in a note.
On Friday, Wall Street closed sharply lower.
The British pound decreased 1.1 per cent to US$1.3054. The euro was flat at $1.1061.
In currency trading, the dollar rose to 108.52 Japanese yen from 108.35 yen on Friday. Japan's Nikkei pared opening losses to be off 0.2 per cent. Yields on US debt came off lows. An albeit imperfect rule of thumb says a recession may be a year or so away when the three-month Treasury's yield is higher than a 10-year Treasury's.
Benchmark U.S. crude oil rose 8 cents to $51.64 per barrel in electronic trading on the New York Mercantile Exchange.
Gold, which posted its best month in five in January, was last up 0.1 percent at $1,591.26 while yields on USA debt lingered near five-month lows as the United States, Japan and other countries tightened travel curbs to China, where the death toll from the virus rose to 213.