Equities hit record highs as dollar falls on vaccine hopes

David Randall

By David Randall

NEW YORK (Reuters) - Most world equity benchmarks rose along with gold and U.S. Treasury bonds on Thursday as hopes for a vaccine-led economic recovery offset warnings the death toll from the coronavirus pandemic could spike in the coming weeks.

Stocks have raced to global record peaks over the last four weeks, pushing the dollar down to 2 1/2-year lows, following the announcement of three viable vaccines. Oil prices, meanwhile, touched their highest levels since March.

Britain will begin inoculations next week, while the U.S. Food and Drug Administration will hold its own advisory committee meeting next week that could determine when treatments are approved for use in the country. New York Governor Andrew Cuomo has said the state's first vaccine delivery, enough for 170,000 residents, is expected on Dec. 15.

"Markets have pulled forward and bridged the gap between where we were pre-vaccine and where we are going to be when everyone has got the shot," said Ned Rumpeltin, European head of currency strategy at TD Securities.

"It puts a floor under the long-term risks, but there are plenty of short-term ones in the interim that we need to sort out," Rumpeltin said.

The head of the U.S. Centers for Disease Control and Prevention warned Wednesday that the months of December, January, and February will be "the most difficult time in the public health history of this nation."

The mayor of Los Angeles, meanwhile, imposed sweeping new economic restrictions on Wednesday and said that "our City is now close to a devastating tipping point."

MSCI's gauge of stocks across the globe gained 0.32% following broad gains in Asia and mixed trading in Europe.

On Wall Street, the Dow Jones Industrial Average rose 85.99 points, or 0.29%, to 29,969.78, and the Nasdaq Composite added 27.82 points, or 0.23%, to 12,377.18.

The S&P 500 hit a record high during the session but ended down 2.25 points, or 0.06%, to 3,666.76 after a report that Pfizer Inc PFE.N had slashed the target for the rollout of its COVID-19 vaccine.

Investors kept looking for signs that a stimulus deal could be reached in the U.S. Congress to boost the economy until vaccines are widely available.

The U.S. Labor Department said initial jobless claims decreased to a seasonally adjusted 712,000 for the week ended Nov. 28. Economists polled by Reuters had forecast 775,000 applications.

Benchmark 10-year U.S. Treasury notes rose 10/32 in price to yield 0.9129%, from 0.946% late Wednesday. The dollar index fell 0.357%, with the euro up 0.25% to $1.2145.

"Currency investors are taking on more risk following the latest vaccine breakthroughs," Morgan Stanley said in a note.

Brent crude prices rose to their highest since early March on renewed hopes for a U.S. stimulus deal and after major oil producers agreed to increase output by a modest 500,000 barrels per day (bpd) from January.

U.S. crude rose 0.77% to $45.63 per barrel and Brent was at $48.59, up 0.7% on the day.

(Reporting by David Randall; Editing by Bernadette Baum, Diane Craft and David Gregorio)