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By Sinéad Carew
NEW YORK (Reuters) - Stock markets around the world fell on Tuesday, as oil prices hit a two-decade low a day after some U.S. crude oil futures turned negative for the first time ever, underlining worries about deep economic damage from the coronavirus pandemic.
While gold is often seen as a safe haven bet, that commodity also declined on Tuesday as investors favored cash.
Investors rushed to buy bonds, which pushed down U.S. Treasury yields, with the five-year note hitting a new record low as the difficulties of restarting the U.S. economy sank in.
June oil futures plunged, as the panic that sent U.S. May futures to below minus $40 per barrel on Monday intensified due to worries about the coronavirus pandemic's effect on fuel demand in a market overrun by supply.
Equities around the world tumbled, with Wall Street's major stock indexes following Europe and Asia lower.
Monday's plunge in oil, which saw some prices reach minus $40 a barrel, resulted from growing crude stockpiles and dwindling storage space as demand dwindled because of worldwide lockdowns aimed at containing the spread of the virus.
U.S. crude <CLc1> recently rose 104.78% to $1.80 per barrel and Brent <LCOc1> was at $20.19, down 21.04% on the day.
As countries around the world keep reporting new coronavirus cases and deaths, they have also been working on plans to reopen economies amid signs containment efforts seemed to be working.
"Investors are feeling more comfortable about the virus curve flattening but are coming to grips with the economic realities," said TD Ameritrade Institutional’s senior trading strategist, Mike Turvey, noting that the fall-off of oil demand and prices was one alarming sign along with earnings news.
With bleak news at the forefront of investors minds, Turvey said investors ignored suggestions U.S. lawmakers were close to agreement on a fourth coronavirus spending bill.
The Dow Jones Industrial Average <.DJI> fell 607.41 points, or 2.57%, to 23,043.03, the S&P 500 <.SPX> lost 85.63 points, or 3.03%, to 2,737.53 and the Nasdaq Composite <.IXIC> dropped 321.38 points, or 3.75%, to 8,239.35.
The pan-European STOXX 600 index <.STOXX> lost 3.19% and MSCI's gauge of stocks across the globe shed 2.95%.
The U.S. dollar rose against a basket of currencies as investors sought the safety of the world's most liquid currency in a risk averse market.
The dollar later pared some gains as the session wore on. The dollar index <=USD> rose 0.214%, with the euro <EUR=> up 0.01% to $1.0863.