GLOBAL MARKETS-New York order spooks Wall Street, offsets calm from policy efforts

(Adds close of U.S. markets)
* Wall Street retreats after New York issues stay at home
order
* Dollar eases as central banks pledge liquidity
* European stocks gain after volatile week
* Oil posts steepest weekly fall since 1991
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash
NEW YORK, March 20 (Reuters) - Wall Street retreated on
Friday after New York ordered residents to stay home, rattling
investors who had welcomed this week's fiscal and monetary
measures to counter the coronavirus shock and help revive the
safe-haven appeal of bonds and gold.
Gold rose more than 3% at one point as it regained a bit of
its flight-to-safety luster and the yield on U.S. Treasuries
fell as emergency measures aimed at stabilizing financial
markets briefly took hold after days of sharp volatility.
The dollar staged a furious rally this week as investors
scrambled to obtain cash, rising 4.32% in the biggest weekly
gain since the 2008 financial crisis. The policy efforts helped
staunch the steep nosedive in global equity markets.
Stocks had gained on Thursday in less-tumultuous trade and
were trading higher on Wall Street before New York Governor
Andrew Cuomo said he would mandate all non-essential workers to
stay home and all non-essential businesses close. Cuomo pleaded for more medical personnel and supplies to
treat coronavirus cases that could overwhelm the hospitals in
New York, a state of nearly 20 million.
Cuomo's remarks "spooked people, it spooked the market,"
said Tim Ghriskey, chief investment strategist at Inverness
Counsel in New York. "It's all fear, fear of more negative
headlines."
On Wall Street, the Dow Jones Industrial Average .DJI fell
913.21 points, or 4.55%, to 19,173.98. The S&P 500 .SPX lost
104.47 points, or 4.34%, to 2,304.92 and the Nasdaq Composite
.IXIC dropped 271.06 points, or 3.79%, to 6,879.52.
U.S. stocks had been poised for their first two-day gain
since Wall Street tumbled from all-time highs in February to
their sharpest decline in three decades.
A top International Monetary Fund official said the impact
of the coronavirus pandemic would be "quite severe" but the long
expansionary period preceding it should help the global economy
weather the shock. The Federal Reserve rolled out more emergency support as it
enhanced efforts with other major central banks to ease a global
dollar-funding crunch. It also backstopped a market essential
for U.S. state and local government finances and ramped up its
purchases of mortgage-backed securities. Markets have been reassured by the speedy central bank
action this week but the full fiscal response from governments
remains to be seen and is critical, said Kristina Hooper, chief
global market strategist at Invesco in New York.
"The dash to cash we saw earlier this week has been relaxed
a bit. Now Treasuries are once again perceived to be a
safe-haven asset class," Hooper said. "That's good, as it
suggests at least a dialing down of risk-off sentiment."
Norway's central bank became the latest to cut interest
rates while China was set to unleash trillions of
yuan of fiscal stimulus to revive its economy. The dollar eased after currencies, from the Australian
dollar AUD= to the British pound GBP= , tumbled to multi-year
lows earlier this week.
MSCI's U.S.-centric gauge of stocks across the globe
.MIWD00000PUS shed 1.84%, while emerging market stocks rose
4.58%.
U.S. gold futures GCcv1 settled 0.4% higher at $1,484.6 an
ounce.
The dollar rose against a basket of currencies =USD in a
week when investors liquidated everything from stocks to bonds
to gold and commodities to raise cash. The dollar hit a
three-year peak of 102.99 in early Asian trading.
The dollar index =USD fell 0.214%, with the euro EUR=
down 0.24% to $1.0664.
The Japanese yen weakened 0.44% versus the greenback at
111.23 per dollar.
U.S. home sales surged to a 13-year high in February, but
the housing market recovery is likely to be derailed by the
coronavirus outbreak, which has unleashed a wave of layoffs and
left the American economy headed toward recession. L1N2BD0QT
The global economy already is in recession as the hit to
economic activity from the pandemic has become more widespread,
according to economists polled by Reuters. Oxford Economics cut its global growth forecast for 2020 to
zero, making this year the second-weakest for the world economy
in almost 50 years of comparable data, with only 2009, in the
depths of the global financial crisis, being worse.
The broad pan-European STOXX 600 index .STOXX rose 1.82%.
But stocks pared some of their gains as fears over the economic
shock from the coronavirus quashed initial optimism.
Britain's FTSE .FTSE rose 0.8%, Germany's DAX .GDAXI
gained 3.7%, and France's CAC 40 .FCHI rose 5%.
The European Central Bank's 750 million-euro emergency bond
purchase scheme, announced on Wednesday, has boosted southern
European debt, alleviating some concern over how already heavily
indebted states would finance the fiscal measures needed to
defend against coronavirus.
Investors in Asia were happy that Wall Street had not
plunged again. South Korean shares .KS11 bounced 7.4%, though
that still left them down more than 11% for the week.
Australia's beleaguered market .AXJO eked out a 0.70%
gain, and futures for Japan's Nikkei .N225 were trading up at
17,710, compared with the cash close of 16,552.
Oil prices fell for the fourth week in a row, with U.S.
crude posting its worst week since 1991, as the coronavirus
outbreak knocked the demand outlook and Moscow rejected U.S.
intervention in its price war with Saudi Arabia.
West Texas Intermediate CLc1 fell $2.69 to settle at
$22.53 a barrel while Brent crude futures LCOc1 fell $1.49 to
settle at $26.98 a barrel.
Euro zone bond yields tumbled as risk sentiment picked up to
support Southern European bonds.
Relatively calm trading in U.S. Treasuries early in the
session returned to the volatile patterns seen earlier this week
after Cuomo said he would issue his executive order.
Benchmark 10-year U.S. Treasury notes US10YT=RR fell 124
basis points to yield 0.8869%.