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GLOBAL MARKETS-Stocks approach new highs but healthcare caps Wall St gains

Published 2019-04-16, 02:44 p/m
© Reuters.  GLOBAL MARKETS-Stocks approach new highs but healthcare caps Wall St gains
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* World stock markets rise on positive German, Chinese data

* Euro falls on reports of skepticism over growth rebound

* Oil price rally takes a breather on supply concerns

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By April Joyner

NEW YORK, April 16 (Reuters) - Stocks around the globe rose on Tuesday to six-month highs as positive economic data in China and Germany boosted investor sentiment, though concerns about the impact of U.S. policy on the healthcare sector capped gains on Wall Street.

Wall Street's S&P 500 .SPX edged higher after upbeat quarterly reports from Johnson & Johnson (NYSE:JNJ) JNJ.N and BlackRock Inc (NYSE:BLK) BLK.N , with financials leading gains. Healthcare stocks, however, turned lower as shares of insurers fell after UnitedHealth Group Inc (NYSE:UNH) UNH.N discussed concerns about U.S. Senator Bernie Sanders' "Medicare for All" plan, as well as the White House's proposal to end discounts from drugmakers. money seems to be rotating out of healthcare into financials," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "Thus far, I'd say earnings are somewhat as expected. The key thing out of the earnings season is going to be the second-half (of 2019) outlook."

Even though Wall Street stocks were treading water, an advance in Chinese and European shares helped push the MSCI world equity index .MIWD00000PUS to a six-month high. Positive data, including a quicker pace of growth in Chinese home prices and improving sentiment among German investors, bolstered global equities.

The latest leg higher in this year's global rally comes as a degree of calm has descended across financial markets. European stock volatility .V2TX reached its lowest level since January 2018, while on Wall Street, the CBOE Volatility Index .VIX hit its lowest level in more than six months.

The U.S.-China trade dispute, signs of slowing global corporate earnings and fears about an economic downturn have weighed on riskier assets in the past year. But investors have been quick to seize on positive news to keep the bull market running.

"After the strong rally we have seen in equities, people are now waiting for the next catalyst," said Natixis Cross Asset Strategist Florent Pochon.

Among the information investors are anticipating is Chinese quarterly economic growth data, due on Wednesday. After a worrying start to the year, Chinese numbers have been more positive as authorities ramped up stimulus measures, soothing investor fears about a slowdown in the world's second-biggest economy.

The Dow Jones Industrial Average .DJI rose 73.28 points, or 0.28%, to 26,458.05, the S&P 500 .SPX gained 2.47 points, or 0.09%, to 2,908.05 and the Nasdaq Composite .IXIC added 29.07 points, or 0.36%, to 8,005.08.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.18%. The pan-European STOXX 600 index .STOXX ended 0.3% higher.

As stocks advanced, U.S. Treasury yields rose to four-week highs. Benchmark 10-year notes US10YT=RR last fell 11/32 in price to yield 2.5904%, from 2.553% late on Monday. during this year's rally in stocks, "the flight-to-quality bid in Treasury had not subsided," JonesTrading's O'Rourke said. "Now we're starting to see the beginning of that, and that's pushing yields higher."

Spot gold prices XAU= dropped to their lowest level this year and were last down 0.9% as risk appetite dented demand for the precious metal's safe-haven credentials. currency markets, sterling slipped 0.3% after the Guardian newspaper reported that talks between Prime Minister Theresa May and the opposition Labor Party regarding Britain's exit from the European Union had stalled. The Labor Party denied the report. euro EUR= dipped after Reuters reported that some European Central Bank policymakers doubt whether growth will rebound in the euro zone as projected. The currency was last down 0.2% at $1.13. dollar index .DXY ticked up 0.1%.

Oil steadied as expectations of tightening global supply, raised by fighting in Libya and declining Venezuelan and Iranian exports, were offset by uncertainty about the commitment to an OPEC-led production cut. crude LCOc1 futures rose 31 cents to $71.49 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 40 cents to $63.80 a barrel.

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