U.S. Stocks Rise, Treasuries Slide With Crude Oil: Markets Wrap

  • Oil falls more than 4 percent after surprise rise in supplies
  • S&P 500 edges higher after erasing earlier gains on oil data

BlackRock's Harrison Says Inflation Hurts Monetary Hawks

U.S. stocks halted a two-day slide as banks rebounded amid a drop in Treasuries. Crude tumbled on rising supplies, while the dollar was little changed as investors awaited a key day of events that could set the tone on financial markets.

The S&P 500 Index rose, buoyed by lenders after 10-year note yields added three basis points. Government data showing crude stockpiles in the U.S. rose last week sent oil plunging more than 4 percent toward $46. The report dented market calm before a series of events Thursday, from the ECB’s policy decision to testimony by the former FBI director and the U.K.’s election.

Alan Knuckman of Bulls-Eye Option and Bloomberg’s Mark Barton examine the relation of gasoline and oil inventories.

Source: Bloomberg)

The risk-off mood that characterized the start of the week had abated, though traders seemed reluctant to add any big positions before the ECB’s policy decision, the U.K. election and former FBI Director James Comey’s Senate testimony. Comey released prepared testimony saying the president asked him to end an investigation into the former national security adviser.

Read our Markets Live blog here.

Here are some of the key upcoming events:

  • The European Central Bank releases its policy decision Thursday. Mario Draghi speaks later that day. Don’t expect policy changes, but the bank may drop the reference to “downside” risks to growth, while reiterating a weak inflation outlook, Bloomberg Intelligence said.
  • Surveys of U.K. voters over the past few weeks have indicated a tightening race for Thursday’s election, increasing the chance that Prime Minister Theresa May might not bolster her majority.
  • Comey’s testimony may give clues on how politically effective the Trump administration will be in refocusing attention on its policy agenda.

Here are the main moves in markets:

Stocks

  • The S&P 500 added 0.2 percent to 2,433.08 as of 4 p.m. in New York.
  • Energy shares tumbled 1.5 percent and bank shares added 0.9 percent.
  • The Stoxx Europe 600 Index lost 0.1 percent.

Commodities

  • Gold’s run toward $1,300 an ounce faltered as bullion futures fell 0.6 percent to $1,289.40 an ounce after surging 1.1 percent in the previous session. 
  • WTI crude oil lost 5 percent to $45.76 a barrel, following its 1.7 percent advance on Tuesday. An unexpected increase in U.S. crude and gasoline stockpiles stoked fears that the global supply glut will remain unabated.

Currencies

  • The euro rebounded after touching its lowest in a week on the ECB inflation report. The shared currency weakened 0.1 percent to $1.1267.
  • The Bloomberg Dollar Spot Index added 0.2 percent the dollar rose after Comey’s opening statement for congressional testimony on Thursday was released. The measure touched the lowest level since October on Tuesday.
  • The yen was little changed at 109.842 per dollar, after climbing 0.9 percent on Tuesday.

Bonds

  • The yield on 10-year Treasuries rose three basis points to 2.17 percent, after dropping four basis points on Tuesday.
  • U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund.
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