(Fixes typographical error in paragraph 13)
* Stocks fall, oil slumps after Trump gets virus
* U.S. payrolls disappoint, adding to bearish sentiment
* Dollar holds gains, oil currencies fall on tumbling crude
* Gold holds above $1,900 an ounce but heads lower
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog: LIVE/
By Herbert Lash and Elizabeth Howcroft
NEW YORK/LONDON, Oct 2 (Reuters) - Global equity markets
slumped and investors piled into safer gold and the Japanese yen
on Friday after U.S. President Donald Trump and his wife tested
positive for the coronavirus, adding to market uncertainty just
32 days before U.S. elections.
Trump's bombshell announcement sparked a risk-off mood among
investors already concerned about an elusive coronavirus relief
package aimed at bolstering a U.S. economy that has lost steam,
as seen by slowing jobs growth in September payrolls data.
Gold headed toward its best week in nearly two months even
as it pared early gains, while the Japanese yen made its
sharpest advance in more than a month. But the benchmark 10-year
U.S. Treasury note rose mildly, entrenched in a narrow trading
range it has held for three weeks.
How voters feel about the pandemic on voting day could
determine the election's outcome and that is highly unusual,
said Michael Arone, chief investment strategist for the U.S.
SPDR business at State Street Global Advisors in Boston.
"Today's news demonstrates a bit of a weakness in terms of
the Trump re-election campaign," he said. "The range of outcomes
has expanded and some of the more extreme outcomes have
increased in probability and markets certainly don't like that."
Trump is experiencing mild symptoms but will keep working
after testing positive, administration officials said.
Stocks on Wall Street mostly fell but regional indexes in
Europe ended slightly higher after an initial sell-off on the
Trump news. The FTSEurofirst 300 index .FTEU3 rose 0.22% to
1,405.35 and the STOXX Europe 600 .STOXX added 0.25% to
362.69.
MSCI's benchmark for global equity markets .MIWD00000PUS
fell 0.5% to 565.15, while its emerging markets index .MSCIEF
fell 0.26%.
On Wall Street, the Dow Jones Industrial Average .DJI fell
0.08%, while the S&P 500 .SPX lost 0.61% and the Nasdaq
Composite .IXIC dropped 1.99%.
How long the risk-aversion will last depends on the extent
of the infection within the White House, said Francois Savary,
chief investment officer at Swiss wealth manager Prime Partners.
"It will weigh on the market today and early next week but
will not induce a long-lasting correction if the infection is
contained to Trump," he said.
As for stock market shocks, the assassination of President
John F. Kennedy on Nov. 22, 1963, caused the S&P 500 to plunge
nearly 3% and the New York Stock Exchange shut two hours before
its regular closing time. But the losses were confined to a
single day and the market recovered within two days.
The Labor Department's closely watched employment report on
Friday was the last before the Nov. 3 presidential election.
September's employment gains were the smallest since the
jobs recovery started in May and left the U.S. labor market a
long way from recouping the 22.2 million jobs lost in March and
April, indicating slower growth heading into the fourth quarter.
U.S. nonfarm payrolls increased by 661,000 jobs last month,
below consensus expectations of 850,000, leading to mostly
negative reaction by economists. But both Arone and Steven Ricchiuto, U.S. chief economist at
Mizuho Securities USA in New York, said the loss of government
jobs, mostly seasonal in education, pulled numbers lower while
the private sector's gains were above overall expectations.
"The net result is the seasonal factors pulled down the
state and local portion, very, very dramatically, in particular
in the in education area," Ricchiuto said. "The private sector
component, however, continues to improve at a healthy pace."
The government lost more than 200,000 jobs, Arone said.
"Those job losses on the government side are real, don't get
me wrong. But overall the private sector seems to be hanging in
there pretty well," he said.
BETS ARE OFF
With the election now more uncertain, online gambling site
Betfair on Friday suspended betting on the outcome of the Nov. 3
vote. The news from the White House triggered a rise in the dollar
and the yen. The dollar index =USD rose 0.103%, with the euro
EUR= down 0.28% to $1.1714.
The Japanese yen JPY= strengthened 0.15% versus the
greenback at 105.37 per dollar.
The Australian dollar, which serves as a liquid proxy for
risk assets, was down 0.23% AUD=D3 . Germany's benchmark 10-year bond was down around 0.7 basis
point at -0.536% DE10YT=RR .
Crude prices fell 4% on Trump's positive test for COVID-19,
roiling risky assets, and as rising global crude output
threatens to overwhelm the oil market's weak recovery.
Brent crude futures LCOc1 settled down $1.66 at $39.27 a
barrel. U.S. crude futures CLc1 fell $1.67 to settle at $37.05
a barrel.
Gold pared early gains to turn lower as stocks pared losses.
"If more members of the U.S. government's senior leadership
are diagnosed positive, gold could be set for an extended
rally," said Jeffrey Halley, a senior market analyst at OANDA.
Spot gold prices XAU= fell 0.17% to $1,901.77 an ounce.
U.S. gold futures GCv1 settled down 0.5% at $1,907.60.
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Emerging markets http://tmsnrt.rs/2ihRugV
Futures drop https://tmsnrt.rs/3l9VRay
Nonfarm payrolls https://tmsnrt.rs/3jCrvgV
U.S. 10-year Treasury yield https://tmsnrt.rs/2SihitV
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