Oil rises after inventories data, dollar gains as Brexit materializes
NEW YORK (Reuters) – Stocks edged up on Wall Street on Wednesday, but not enough to lift a global equities index, while crude-oil futures hit a weekly high after a smaller-than-expected build in US inventories.
The euro slipped after Reuters reported European Central Bank policy makers are wary of making any new change to their policy message in April.
Weighing on the euro and pound, Prime Minister Theresa May formally began Britain’s divorce from the European Union, a decision pitching her country into the unknown. On Tuesday, the Scottish Parliament backed a bid to hold an independence referendum that could break up the UK, adding another layer of uncertainty for investors.
Gains in the energy sector, up more than 1%, kept the S&P 500 afloat. None of the other 10 sectors moved more than a half a percent up or down.
Wall Street rose on Tuesday, with the Dow snapping an eight-day losing streak after a jump in consumer data boosted hopes in a stronger US economy. On Wednesday, contracts to buy previously owned US homes jumped to a 10-month high in February.
“The big talk of the day is [Britain’s] official request to leave the EU, which we think is likely to be a counterbalance for the markets for many days to come,” Peter Cardillo, the chief market economist at First Standard Financial in New York, wrote in a note. “We see [US] oil prices moving towards the $50 range as being the markets driving force of the day.”
In early afternoon trading, the Dow Jones Industrial Average fell 67.89 points, or 0.33%, to 20,633.61, the S&P 500 lost 1.65 points, or 0.07%, to 2,356.92, and the Nasdaq Composite added 5.01 points, or 0.09%, to 5,880.15.
The pan-European FTSEurofirst 300 index rose 0.35%, while MSCI’s gauge of stocks across the globe fell 0.19%.
Emerging-market stocks rose 0.09%.
Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.42%, while Japan’s Nikkei closed up less than 0.1%.
The dollar index gained 0.37%, with the euro down 0.55% to $1.0752.
Sterling hit a one-week low of 1.2378 earlier and was last trading at $1.2407, down 0.33%.
Benchmark US Treasury yields fell. The 10-year US Treasury yield hit a session high at 2.427%, higher than Tuesday’s. Benchmark 10-year notes last rose 6/32 in price to yield 2.3891%.
Oil prices rose after US gasoline stockpiles dropped sharply last week, while crude inventories grew less than anticipated.
US crude last rose 1.9% to $49.28 a barrel, and Brent traded at $52.23, up 1.8% on the day.
Spot gold rose 0.0% to $1,251.59 an ounce. US gold futures fell 0.3% to $1,251.30 an ounce.