By Rodrigo Campos
NEWYORK (Reuters) – A gauge of stocks across the world pared losses on Wednesday as a rally in bank shares helped buoy Wall Street, but the outlook on earnings soured after a warning on the European auto sector and a revenue miss from IBM.
Crude futures fell for the first session in four after U.S. government data showed a much larger-than-expected build in crude inventories. WTI touched its lowest price in a month.
The U.S. dollar rose as the market awaited the minutes from the latest Federal Reserve meeting. Lower-than-expected UK inflation data weighed on sterling, which gave up the previous day’s gains.
On Wall Street, IBM <IBM.N> fell 6.2 percent, dragging blue-chips lower a day after the company missed revenue expectations. On Tuesday, the S&P 500 posted the biggest daily gain since late March.
Stocks extended losses when oil prices fell further, but a steady climb in financial sector stocks had the S&P 500 near break-even.
“It’s too early to tell if Tuesday’s rally was a ‘dead cat bounce’ or the market setting a base,” said JJ Kinahan, chief market strategist at TD Ameritrade. “We’re coming off an incredible day, so it wouldn’t be unusual to see some profit taking.”
The Dow Jones Industrial Average <.DJI> fell 29.27 points, or 0.11 percent, to 25,769.15, the S&P 500 <.SPX> gained 2.61 points, or 0.09 percent, to 2,812.53 and the Nasdaq Composite <.IXIC> dropped 3.59 points, or 0.05 percent, to 7,641.90.
European stocks hit a one-week high in early trade, but then were pulled lower by a 1.9 percent fall in an index of auto stocks <.SXAP>. Goldman Sachs said slow demand in China could hit earnings in the sector.
The pan-European STOXX 600 <.STOXX> lost 0.40 percent and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> shed 0.01 percent.
Emerging market stocks rose 0.05 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.27 percent higher, while Japan’s Nikkei <.N225> rose 1.29 percent.
CRUDESLIDES, DOLLARINCHES UP
U.S. crude futures tumbled below $70 a barrel after data showed U.S. stockpiles rose by 6.5 million barrels, almost triple what analysts had forecast, while exports dropped.
WTI <CLc1> fell 2.34 percent to $70.24 per barrel and Brent <LCOc1> was last at $80.28, down 1.39 percent on the day.
The euro <EUR=> fell 0.39 percent to $1.1528 and Sterling <GBP=> was last trading at $1.314, down 0.33 percent on the day.
The Japanese yen weakened 0.03 percent versus the greenback at 112.31 per dollar. The dollar index <.DXY> rose 0.37 percent.
Minutes of the last Fed meeting, due Wednesday, should feed expectations of further tightening.
The Brazilian real rose against the dollar <BRL=> after data showed economic activity rose more than expected in August.
U.S. Treasury yields continued to trade range-bound after a massive run-up last week.
Benchmark 10-year notes <US10YT=RR> last fell 4/32 in price to yield 3.1709 percent, from 3.156 percent late on Tuesday.
The 30-year bond <US30YT=RR> last fell 6/32 in price to yield 3.3399 percent, from 3.33 percent late on Tuesday.
(Reporting by Rrigo Campos, Karen Brettell, David Gaffen and Richard Leong in New York; additional reporting by Meda Singh in Bengaluru; Editing by David Gregorio and Jonathan Oatis)