By Matt Scuffham
NEW YORK, Jan 25 (Reuters) - Global stocks lagged and the
dollar advanced in volatile markets on Monday, with sentiment
hit by increasing COVID-19 cases, delays in vaccine supplies and
uncertainty over a $1.9 trillion U.S. stimulus plan.
Equity markets have scaled record highs in recent days on
bets vaccines will start to reduce infection rates worldwide and
on a stronger U.S. economic recovery under President Joe Biden.
However, investors are wary about towering valuations amid
questions over the efficacy of the vaccines in curbing the
pandemic and as U.S. lawmakers continue to debate a coronavirus
aid package.
"The risk for these markets is that, after a bumper couple
of months, investors may start to wonder whether they're looking
a little frothy," said Craig Erlam, senior market analyst at
OANDA Europe.
U.S. stocks were mixed. The Nasdaq index hit a record high
on hopes of bumper earnings later this week from mega-cap
technology companies but the Dow Jones Industrial Average index
struggled to keep pace.
By 2:51 PM ET, the Dow Jones Industrial Average fell
107.51 points, or 0.35%, to 30,889.47, the S&P 500 gained
6.8 points, or 0.18%, to 3,848.27 and the Nasdaq Composite
added 67.86 points, or 0.5%, to 13,610.92.
European shares closed at two-week lows as a slump in German
business morale underscored the damage from tighter COVID-19
restrictions.
The pan-European STOXX 600 index reversed early
gains and finished 0.8% lower. The German DAX fell
1.7%, France CAC 40 was down 1.6% and the UK's FTSE 100
declined 0.8%.
The MSCI world equity index, which tracks
shares in 49 nations, rose 0.48 points or 0.07%, to 667.17.
All eyes were on Washington, D.C., as U.S. lawmakers agreed
that getting COVID-19 vaccines to Americans should be a priority
even as they locked horns over the size of the pandemic relief
package.
Financial markets have been eyeing a massive package, though
disagreements have meant months of indecision in a country
suffering more than 175,000 COVID-19 cases a day with millions
out of work.
"The immediate question now is when stimulus aid will be
approved and how much?," asked Christopher Grisanti, chief
equity strategist at MAI Capital Management.
The dollar advanced to a near one-week high against a basket
of currencies, as volatility in stock markets around the globe
sapped investors' appetite for riskier currencies.
The dollar index, which tracks the greenback versus a
basket of six currencies, rose 0.129 points or 0.14 percent, to
90.367. The euro was down 0.28 percent, at $1.2136.
Gold prices pared gains on Monday as the dollar edged
higher. Spot gold prices rose $3.06 or 0.17 percent, to
$1,855.61 an ounce. U.S. gold futures settled 0.1% lower
to $1,855.20 per ounce.
As global COVID-19 cases inched toward 100 million, with
more than 2 million dead, investors digested mixed news on the
progress of vaccine roll-outs.
Moderna Inc said it believes its COVID-19 vaccine
protects against new variants found in Britain and South Africa.
Moderna shares rose 10.3%.
AstraZeneca is not doing enough to try to resolve a
dispute over delayed COVID-19 vaccine deliveries to the European
Union, the bloc's top health official said, as news emerged the
drugmaker is also facing supply problems elsewhere.
U.S. investors were also awaiting a busy earnings week, with
tech giants Apple Inc, Facebook Inc, Tesla Inc
and Microsoft Corp all due to report results.
Sentiment in Asia was boosted by a report that China had
surpassed the United States as the largest recipient of foreign
direct investment in 2020, with $163 billion in inflows.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 9.21 points or 1.28%.
In commodity markets, Brent crude settled at $55.88
a barrel, up 47 cents or 0.85%. U.S. crude settled at
$52.77 a barrel, up 50 cents or 0.96%.
(Reporting by Matt Scuffham; Additional reporting by Devik Jain
and Shreyashi Sanyal in Bengaluru; Editing by Andrea Ricci)
Astrazeneca (AZN)
