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Stocks rise, bitcoin rally slows as Biden bows out

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Wall Street stocks advance

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China trims key short-term rate

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Oil prices fall, US dollar gains

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Earnings season to test lofty tech valuations

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Safe-haven gold drops

(Updates with U.S. markets, adds analyst quote)

By Amanda Cooper and Chibuike Oguh

LONDON/NEW YORK, July 22 (Reuters) -

An index of global shares steadied on Monday as investors

weighed President Joe Biden's decision to end his re-election

bid at the weekend, while a surprise rate cut by China's central

bank failed to boost Asian markets.

Biden announced on Sunday he would drop out of the U.S.

presidential election race and endorsed Vice President Kamala

Harris for the Democratic ticket to challenge former President

Donald Trump, who is the Republican nominee.

Markets took the news in their stride, with MSCI's gauge of

stocks across the globe up 0.39% to 814.07. The

index fell 2.1% last week in its worst weekly performance since

April.

"I think largely the Biden bailing out was priced in; we

just needed definitiveness on that," said Lou Basenese,

president and chief market strategist at MDB Capital in New

York. "Now you're seeing the Trump trades, more risk taking, and

small caps, going long oil and gas, and Bitcoin really returning

to the market," he added.

The dollar was slightly higher against a basket of

currencies, capturing some safe-haven flows, while Bitcoin -

which has tended to be a beneficiary of the growing chances of a

return of Trump to the White House - steadied after having

fallen on Sunday following Biden's announcement.

The dollar index gained 0.13% at 104.36, with the

euro up 0.03% at $1.088. Bitcoin, which hit

six-week highs last week in its strongest weekly rally since

February, traded on a more even keel on Monday, down 0.25% at

$66,811.97.

On Wall Street, the benchmark S&P 500 index was

trading higher led by gains in technology stocks. Nvidia ( NVDA )

was up nearly 3%, buoyed by news it is working on a new

AI chip for the Chinese market.

The Dow Jones Industrial Average rose 0.01% to

40,292.92, the S&P 500 gained 0.57% to 5,536.48 and the

Nasdaq Composite gained 0.89% to 17,883.88.

Investors will be eyeing a packed week of corporate

earnings. Tesla and Google-parent Alphabet

kick off the season for the "Magnificent Seven" megacap group of

stocks.

U.S. Treasuries were little changed as markets assessed

the uncertainly surrounding the race for the White House, with

yields on benchmark U.S. 10-year notes adding 0.4

basis points to 4.243%. Markets are fully pricing in the

prospect of a rate cut by the Federal Reserve in September,

which has helped underpin risk appetite..

"The withdrawal of President Biden from the race, I

don't think is going to have any impact on the market because

whether it's Kamala Harris or somebody else, the policies are

going to be the same," said David Spika, chief markets

strategist at Turtle Creek Wealth Advisors in Dallas.

"The market's growing today because big tech is back. We

saw a couple of weeks in a row where there was a rotation out of

the big tech names into small caps and values and cyclicals,

which actually was very healthy." he added.

Europe's biggest banks also report this week, with eyes on

whether the gains from higher interest rates have run out of

steam and if recent political drama is weighing on sentiment.

The STOXX 600 finished up 0.93%.

The People's Bank of China cut short-term rates by 10 basis

points, which pulled down long-term borrowing costs and bond

yields. The move follows Beijing's release of a policy document

on Sunday outlining its ambitions for the economy. MSCI's

broadest index of Asia-Pacific shares outside Japan

lost 0.64%.

Oil prices fell for a

second consecutive session

amid rising stockpiles and signs of weak demand. Brent

crude futures fell 0.54% to $82.18 per barrel. The U.S.

West Texas Intermediate crude futures contract for August

delivery, which expires on Monday, was down 0.4% to $79.79 a

barrel.

Gold prices fell to more than a one-week low. Spot gold

lost 0.54% to $2,387.04 an ounce. U.S. gold futures

gained 0.28% to $2,402.10 an ounce.