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(New throughout, adds opening prices for U.S. stock indexes)
* Dow Jones Industrial Average up 0.2%; S&P 500 up 0.4%
* U.S. Treasury yields hit 4-month highs
* European stocks boosted by strong Q3 earnings
* Britain, EU meet for Brexit talks
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Matt Scuffham
NEW YORK, Oct 23 (Reuters) - Global stocks rallied and
benchmark U.S. Treasury yields hit 4-month highs on Friday,
buoyed by optimism that a deal can be reached on a fresh U.S.
coronavirus relief package.
White House Chief of Staff Mark Meadows late on Thursday
said that negotiations with lawmakers on a coronavirus relief
package, now totalling $1.9 trillion, have entered a new phase
with congressional committee chairs meeting and the two sides
trading technical language.
The Dow Jones Industrial Average opened up 66.2
points, or 0.23%, to 28,429.86, the S&P 500 gained 12.62
points, or 0.37%, to 3,466.11 and the Nasdaq Composite
added 31.97 points, or 0.28%, at 11,537.98.
"The stimulus talks are continuing so the market is happy
about that even though we probably won't get anything done
before the election," said Thomas Hayes, managing member at
Great Hill Capital LLC in New York.
Expectations of bigger government stimulus have also boosted
U.S. borrowing costs. Benchmark 10-year Treasury yields
rose as high as 0.872%, the highest since June 9. It
is now edging above its 200-day daily moving average, which it
has held under since December 2018.
The yield curve between two-year and 10-year notes
steepened to 71 basis points, the widest spread
since June 5.
Gains in U.S. stock markets were capped by investors keeping
their powder dry ahead of the U.S. election on Nov. 3.
U.S. President Donald Trump trails former vice president Joe
Biden in national polls, but the contest is much tighter in some
battleground states where the election will likely be decided.
The final debate between Trump and Biden on Thursday offered
few surprises and little new direction.
"There is no reason for markets to take big long positions
as we have the election in less than 10 days," said Francois
Savary, chief investment officer at Swiss wealth manager Prime
Partners.
European stocks were up 1%, heading for their best
day in five trading sessions, but still set for their worst week
in a month. Strong third-quarter results offset key business
survey data showing patchy recoveries in Germany and France.
Britain's main stock index rose 1.5% in its best day
since early September after Barclays reported
stronger-than-expected third-quarter earnings and last month's
British retail sales beat expectations.
The chief negotiators for Britain and the European Union
meet on Friday for talks on a last-gasp trade deal to avert a
tumultuous finale to the five-year Brexit crisis.
In Asia-Pacific, MSCI's broadest index of the region's
shares outside Japan was flat, while Japan's
Nikkei ticked up 0.2% and the CSI300 index of mainland
China shed 1.3%.
The MSCI world equity index, which follows
shares in nearly 50 countries, was up 0.2%, but set for its
biggest weekly fall in a month.
In the euro zone, Italian 10-year bond yields dropped 4
basis points to 0.767% as investors seemed confident an S&P
Italy ratings review late on Friday will not lead to a
downgrade.
In currency markets, the dollar was 0.2% lower against a
basket of currencies early in Europe, shy of a seven-week
low hit on Wednesday.
The euro ticked up 0.3% against the dollar, as was
sterling at $1.3084.
The Chinese yuan also held its ground against the
dollar after an official at China's foreign exchange regulator
said it has been more stable than expected, suggesting
authorities are not too worried about its recent rise.
Oil prices gained. Brent futures added 0.5% to
$42.68 per barrel. U.S. crude futures gained 0.5% to
$40.84 per barrel.
Spot gold rose 0.4% to $1,911.14 per ounce.
(Additional reporting by Tom Arnold in London and Medha Singh
and Shivani Kumaresan in Bengaluru
Editing by Tomasz Janowski and Nick Zieminski)
