* Dow Jones Industrial Average, S&P 500 up 0.1%
* MSCI world stocks index drops to two week low
* Europe equities head for fourth day of losses
* Oil markets steadies after heavy tumble
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Matt Scuffham and Marc Jones
NEW YORK/LONDON, Oct 22 (Reuters) - Shares on Thursday
slipped globally to a two-week low and oil steadied after
another heavy fall, as the global surge in COVID-19 cases and
fractious U.S. stimulus talks kept financial markets cautious.
Europe has seen coronavirus cases surge to a record high,
with Spain becoming the first Western European country to exceed
1 million infections and France, Britain and Italy all seeing
recent record increases.
In the United States, nearly two-thirds of states were in a
danger zone of coronavirus outbreaks and six, including election
battleground Wisconsin, reported a record one-day increase in
COVID-19 deaths on Wednesday. With traders digesting a drop in weekly jobless claims,
leading U.S. stock indexes were slightly higher in early trade
on hopes a fresh U.S. coronavirus relief package could be
agreed.
The Dow Jones Industrial Average .DJI rose 20.08 points,
or 0.07% to 28,230.90. The S&P 500 .SPX was up 2.94 points, or
0.09%, at 3,438.50, while the Nasdaq Composite .IXIC gained
42.28 points, or 0.37%, to 11,526.98 at the opening bell.
President Donald Trump accused rival Democrats on Wednesday
of being unwilling to craft an acceptable compromise on fresh
stimulus, following reports of progress earlier in the day.
However, House Speaker Nancy Pelosi said negotiators were
making progress and that legislation could be hammered out
"pretty soon." "The noise from COVID-19 virus cases accelerating in
Germany, reaching new highs in Spain and France and a worsening
situation in the United States is finally too loud to ignore by
the markets," said Sebastien Galy, macro strategist at Nordea
Asset Management.
Disappointing German consumer morale data meant
it was the first dip of the week for the high-flying euro EUR=
while Turkey's lira TRY= went tumbling again as its central
bank baulked at hiking interest rates. .EU /FRX Bond market caution also ushered sensitive Italian
government debt yields higher though there was also roaring
demand for a 30-year bond sale there and an early drift back
into ultra-safe German Bunds didn't last past lunchtime.
"Some governments assumed the worst was over ... but now the
invisible enemy is hitting even harder and I am worried about
the fragile economic recovery," said Rabobank strategist Piotr
Matys.
In the currency markets, the dollar was a modest 0.1% higher
against the yen at 104.65 JPY= , while the euro EUR= dipped
0.3% to $1.1820.
But against a basket of major peers the dollar =USD
appeared relatively unaffected by setbacks to stimulus talks,
steadying after touching a seven-week low to trade slightly
higher at 92.736.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS had slipped 0.3%, while the Nikkei
.N225 closed 0.7% lower. .T
The yield on benchmark U.S. 10-year Treasury notes
US10YT=RR ticked down to 0.8092%, from a U.S. close of 0.816%
on Wednesday.
In commodity markets, oil prices steadied after sharp losses
on Wednesday, when higher U.S. gasoline inventories pointed to
deteriorating fuel demand again. EIA/S
U.S. West Texas Intermediate (WTI) crude CLc1 futures
hovered near $40 a barrel and Brent crude LCOc1 futures were
0.5% higher at $41.19.
Gold eased as the dollar edged up, with spot gold XAU=
down 0.4% at 1,916 per ounce. GOL/
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
Emerging market currencies being split by U.S. election https://tmsnrt.rs/3iY7a4i
Coronavirus vs financial markets https://tmsnrt.rs/300KB8r
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(Editing by Catherine Evans and Steve Orlofsky)