Stocks wobble on COVID-19, election uncertainty; dollar dips

NEW YORK: A gauge of global stock markets fell and the US dollar slipped on Tuesday as investors grappled with a surge in coronavirus cases and uncertainty over the impending US election.

MSCI's gauge of stocks across the globe shed 0.22%. The pan-European STOXX 600 index lost 0.86%, while Wall Street's main indexes were mixed in early trade a day after the S&P 500 posted its biggest drop in a month.

"The factors that helped drive the selloff yesterday - COVID trends and the election uncertainty - are likely going to persist this week," said Keith Lerner, chief market strategist at Truist/SunTrust Advisory.

"It's a bit of a low conviction tug-of-war until we move past the election and see what the impact of these COVID numbers rising are."

The United States, Russia, France and other countries have registered record numbers of infections in recent days, and European governments moved to set new curbs in motion to try to rein in a fast-growing surge of cases.

Ahead of the Nov. 3 US presidential election, former Vice President Joe Biden leads President Donald Trump in national opinion polls, but the race is close in key battleground states, and investors have pointed to a tightening of the race as a factor in Monday's volatility.

On Wall Street, the Dow Jones Industrial Average fell 125.1 points, or 0.45%, to 27,560.28 and the S&P 500 lost 5.57 points, or 0.16%, to 3,395.4 while the Nasdaq Composite added 33.91 points, or 0.3%, to 11,392.84.

Investors also focused on corporate earnings with several tech leaders due to report later in the week.

In foreign exchange markets, the dollar index, which measures the greenback against a basket of currencies, fell 0.143%, with the euro up 0.09% to $1.1819.

US Treasury yields fell and the yield curve was flatter as hopes faded for a stimulus deal in Washington to arrive soon. Euro zone bond yields also dipped.

"The market wants some sort of stimulus. It's not getting it yet," said Eric Jussaume, director of fixed income for Cambridge Trust.

Benchmark US 10-year notes last rose 7/32 in price to yield 0.781%, from 0.803% late on Monday.

Oil prices rose as oil companies shut down some US Gulf of Mexico output due to a hurricane, although surging coronavirus infections and rising Libyan supply limited gains.

US crude last rose 0.7% to $38.83 per barrel and Brent was at $40.71, up 0.62% on the day.