U.S., European shares pared earlier gains as crude prices approached the $30 per barrel mark
U.S. and European shares pared earlier gains on Tuesday when depressed oil prices failed to sustain a rally.
Major U.S. stock indexes initially rose in morning trading, building off of Monday’s late-session rallies after historically poor starts to 2016, but a Wall Street rally faltered by midday as crude prices approached the $30 per barrel mark.
The pan-European FTSEurofirst 300 index climbed 1.1 percent after four sessions of declines.
Volatile Chinese markets and the deepening slide of oil have shaken sentiment in equities to start 2016. China stocks closed higher on Tuesday as the central bank tried to stabilize the yuan.
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said stocks were “ripe for a bounce” but it was “too soon to tell whether this is something indicative of a more sustainable rally.”
“Market conditions clearly were oversold,” Luschini said.
The Dow Jones industrial average fell 9.76 points, or 0.06 percent, at 16,388.81, the S&P 500 gained 1.2 points, or 0.06 percent, at 1,924.87 and the Nasdaq Composite added 20.87 points, or 0.45 percent, at 4,658.86.
Shares of Apple, which rose 1 percent after a broker upgrade, helped prop up the indexes.
In Europe, shares of retailers were higher after trading up after solid corporate updates.
MSCI’s broadest gauge of stocks globally rose 0.1 percent after eight straight down sessions.
Oil has been dragged lower by a glut, China’s weakening economy and stock market turmoil, as well as the strong dollar, which makes it more expensive for those using other currencies to buy oil.
U.S. crude prices fell 3.5 percent to $30.29 a barrel, while benchmark Brent dropped 2.7percent to $30.67 a barrel.
“Oil prices have bounced just over $30 per barrel, in a weak fashion that brings dead cats to mind,” Seth Kleinman, head of energy research at Citigroup said.
The U.S. dollar rose for a third straight session as gains on Wall Street and calmer financial markets enhanced appetite for currencies that offer higher yield.
The dollar rose 0.4 percent against a basket of currencies, while the euro slipped 0.2 percent against the dollar.
“We’re seeing a reversal of what we saw in that first week and the dollar has been benefiting as a result,” said Sireen Haraji, currency strategist at Mizuho Securities in New York.
