By David Randall
NEW YORK, Feb 11 (Reuters) - Stock markets globally inched higher on Monday after China struck an upbeat tone as trade talks between the United States and China resumed, though worries remained over the fate of Brexit.
On Wall Street, the Dow Jones Industrial Average .DJI fell 33.65 points, or 0.13 percent, to 25,072.68, the S&P 500 .SPX gained 1.42 points, or 0.05 percent, to 2,709.3 and the Nasdaq Composite .IXIC added 9.87 points, or 0.14 percent, to 7,308.07.
European markets closed higher, with the benchmark Stoxx 6000 index gaining 0.8 percent, while Chinese shares rose more than 1 percent on the first day of trading after the week-long Lunar New Year holiday. MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.02 percent.
Worries about a slowdown in global growth, the U.S.-China trade dispute and the possibility of another U.S. government shutdown have been foremost in investors' minds. At the same time, Britain is due to leave the European Union in six weeks, though it still has no exit plan in place. Data on Monday showed the British economy grew last year at its slowest since 2012. risk remains that investors are unwilling to commit to a breakout until we see what emerges from U.S.-China trade negotiations and Brexit," said John Hardy, head of FX strategy at Saxo Bank.
China expressed hopes for a trade breakthrough as talks between the world's two largest economies resumed, though a U.S. Navy mission through the disputed South China Sea cast a shadow over the prospect for improved Beijing-Washington ties. two sides are trying to come up with a deal before March 1, when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.
Safe-haven bonds and the dollar have gained amid the prolonged uncertainty. The dollar .DXY reached its highest in six weeks against a basket of other currencies, rising for an eighth consecutive day as investors piled into the greenback. FRX/
Worries about Europe's economic slowdown and falling inflation expectations dominated morning trade in debt markets.
The yield on Germany's 10-year Bund, considered the risk-free benchmark for the region, held close to 0.10 percent after touching 0.077 percent on Friday, its lowest since October 2016. The European Commission downgraded its euro zone growth forecasts last week. GVD/EUR
U.S. benchmark 10-year notes US10YT=RR last fell 9/32 in price to yield 2.6644 percent, compared with 2.63 percent late on Friday.
A collapse in border protection talks between U.S. Democratic and Republican lawmakers raised fears of another government shutdown. talks and shutdown (worries) are really weighing on markets," said Sebastian Fellechner, rates strategist at DZ Bank. "We don't see any major movements because of the general and global uncertainty."
The rising threat to growth means equity markets will focus on earnings from major U.S. companies for clues about the path of consumer shares. These include Coca-Cola (NYSE:KO) Co KO.N , PepsiCo Inc PEP.O , Walmart (NYSE:WMT) Inc WMT.N , Home Depot Inc (NYSE:HD) HD.N , Macy's Inc (NYSE:M) M.N and Gap Inc (NYSE:GPS) GPS.N .
Analysts now expect first-quarter earnings for S&P 500 companies to decline 0.1 percent from a year earlier. That would be the first such quarterly profit decline since 2016, according to IBES data from Refinitiv.
Oil prices slipped on concern about slowing global demand and a pick-up in U.S. drilling activity. O/R
U.S. crude CLc1 was 1.2 percent lower at $52.10 per barrel. Brent LCOcv1 was 0.8 percent lower at $61.60.