July 31, 2020 / 7:14 PM / 9 days ago

GLOBAL MARKETS-Stocks fall, safe-havens gain as macro picture clouds tech shine

(Adds gold, oil settlement prices)

By Lawrence Delevingne

BOSTON, July 31 (Reuters) - Global stock markets fell on Friday as doubts about the economic recovery from the coronavirus pandemic overshadowed strong earnings from U.S. technology firms, while the dollar rose but was still set for its worst month in a decade.

Oil prices rose, benefiting from news that U.S. oil output cuts in May were the largest on record, while gold hovered near its all-time peak, helped by dollar weakness and dire economic numbers from far and wide that sparked a rush to safety.

The dollar has been weakening amid expectations the U.S. Federal Reserve will be forced to maintain its ultra-loose monetary policy for years, a policy seen as debasing the currency.

Energy stocks fell sharply after Chevron Corp reported an $8.3 billion loss on asset writedowns and ExxonMobil Corp recorded a second consecutive quarterly loss.

Gains from Apple Inc, Amazon.com and Facebook Inc mitigated index losses following impressive quarterly results after the bell on Thursday.

Edward Moya, a New York-based senior market analyst with trading firm OANDA, said the tech giants gave stocks “a nice boost.” But he noted other corporate disappointments and said the dollar would remain “a punching bag in the short-term” amid the coronavirus and U.S. government stimulus gridlock.

MSCI’s world equity index, which tracks shares in 49 nations, fell 0.48 percent to 549.25, pulled lower by European stocks, which posted their first monthly decline since a market sell-off in March on growing recovery doubts.

On Wall Street, the Dow Jones Industrial Average fell 59.33 points, or 0.23%, to 26,254.32, the S&P 500 gained 2.76 points, or 0.09%, to 3,248.98 and the Nasdaq Composite added 91.03 points, or 0.86%, to 10,678.84.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.337 points, or 0.36 percent, to 93.358.

The euro reached its highest in more than two years - set for its best month in a decade - raising concerns that its relative strength could hit European economic production.

U.S. government negotiations over another coronavirus relief bill were not yet on a path toward a deal, U.S. House of Representatives Speaker Nancy Pelosi said on Friday, hours before the expiration of a federal unemployment benefit that has been an essential lifeline for millions of Americans.

U.S. benchmark 10-year Treasury notes traded flat to yield 0.5331%.

Global funds recommended cutting equity holdings in July to the lowest in four years and suggested keeping bond allocations unchanged from June, a Reuters poll showed.

The pan-European STOXX 600 index gave up early gains to close down 0.9%, pressured by a weak open on Wall Street.

The euro zone’s economy recorded its deepest contraction on record in the second quarter, preliminary estimates showed on Friday, while the bloc’s inflation unexpectedly ticked up in July.

Those figures overshadowed positive manufacturing data from China and Japan.

MSCI’s broadest index of Asian shares outside Japan fell 0.3%. Japan’s Nikkei dropped 2.82% as a stronger yen weighed on exporters.

China’s blue-chip CSI300 index closed up 0.84%, its biggest monthly gain since February 2019, rising 12.8%.

Crude oil recovered from an overnight slump. U.S. crude futures rose 35 cents to settle at $40.27 a barrel, while Brent futures settled up 37 cents at $43.31 a barrel.

Gold rose, with prices up 10% for the month. Spot gold rose $10.50, or 0.5 percent, to $1,969.69 an ounce, just short of record highs set earlier in the week as bullion marched toward the $2,000 milestone.

Silver climbed 2% to $23.94 per ounce, on course for a monthly rise of 33%, its largest on records going back to 1982, supported by investment and industrial demand.

Reporting by Lawrence Delevingne in Boston and Ritvik Carvalho in London; Editing by Dan Grebler and Herb Lash

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