Stocks surge to record highs on hopes virus is peaking, gold ebbs

© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Herbert Lash

NEW YORK (Reuters) – Key U.S. and European stock indexes surged to fresh records on Tuesday after China’s senior medical adviser suggested the deadly coronavirus may be over in April, a rosy outlook that helped crude prices to rebound on renewed Chinese demand.

China’s foremost medical adviser on the outbreak told Reuters the number of new cases were falling in parts and forecast the epidemic would peak this month, but the World Health Organization still feared a “very grave” global threat.

Gold edged lower and the dollar retreated from a four-month high against the euro as risk appetite improved, helping push bond yields higher.

MSCI’s all-world stock index () gained 0.64% to hit a record high, as did the pan-regional STOXX 600 index in Europe, the blue-chip DAX () in Germany and the S&P/TSX Composite () in Canada.

The Dow industrials, S&P 500 and Nasdaq all set records.

Investors are not euphoric and the coronavirus has added a dose of healthy skepticism in the marketplace, said Rahul Shah, chief executive of Ideal Asset Management in New York.

“We are comfortable with stocks grinding higher, versus shooting higher. So we think the slow gradual rise is bullish,” Shah said. While valuations are slightly rich, “when you have a bull market people are going to pay more for quality names.”

Federal Reserve Chair Jerome Powell told Congress that the U.S. economy is in a good place, even as he cited the potential threat from the coronavirus in China and concerns about the economy’s long-term health.

On Wall Street, the Dow Jones Industrial Average () rose 37.72 points, or 0.13%, to 29,314.54. The S&P 500 () gained 16.46 points, or 0.49%, to 3,368.55 and the Nasdaq Composite () added 73.48 points, or 0.76%, to 9,701.87.

The pan-European STOXX 600 index () rose 0.96% and emerging market stocks rose 1.21%.

Concerns about the economic impact of the coronavirus have recently added a safety bid for the dollar, while economic data has backed the view that the U.S. economic outlook is stronger than the euro zone’s.

The dollar has also gained as investors turn to carry trades, where they borrow in low-yielding currencies such as the euro and the Swiss franc and invest in dollars or other high-yielding currencies.

The () fell 0.06%, with the euro () up 0.09% to $1.0919. The Japanese yen weakened 0.07% versus the greenback at 109.87 per dollar.

Brent crude () rose $1.04 to $54.31 a barrel, while U.S. West Texas Intermediate () crude rose 66 cents to $50.23 a barrel.

was down 0.49% at $1,564.20 an ounce.

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