Wall Street pulls out of global slump as oil rallies
Wall Street stocks pulled out of a global slump amid speculation that China will add stimulus to boost its slowing economy and as oil prices rebounded from steep falls. US stocks opened lower, echoing falls in Europe and Asia, on continued concerns about global growth reflected in declining prices for oil and other commodities. "Stocks made a low in the first half of the day and then came back nicely. There was a lot of talk of maybe additional China stimulus. Whether the story is true or not, I don't know, but if it isn't the market will back down in a day or two," said Mace Blicksilver of Marblehead Asset Management.
Oil prices stabilized, with both US and Brent closing modestly higher following Tuesday's losses of more than four percent. A mixed US petroleum report showed commercial crude inventories climbed last week, but gasoline stockpiles fell more than expected. Energy-related stocks turned higher. Dow oil majors ExxonMobil and Chevron both rose 0.4 percent. European markets sold off, with shares in Frankfurt leading the pack, dropping more than 2.6 percent, after a session that also saw periphery counterparts Madrid and Milan shed more than three percent at one point.
Overhanging eurozone markets was uncertainty over which way British voters will jump in a looming referendum on European Union membership weighed on markets and will likely do so for some time, analysts said.
"Eurozone indices are going to suffer under the same Brexit fears currently plaguing the pound and the FTSE," said Connor Campbell, financial analyst at Spreadex trading group, referring to a possible exit by Britain from the EU.
The pound slumped to $1.3913 at one point -- the lowest level since March 2009 -- before recovering a bit at $1.3926 by the end of the session. Analyst John Higgins, of Capital Economics, said uncertainty was key and would continue plaguing the British currency until the June 23 referendum.