By Lewis Krauskopf
NEW YORK (Reuters) - Oil prices rebounded on Wednesday on hopes for output cuts after a steep drop a day earlier, while a gauge of global stock markets fell for a fifth straight session as declines in tech and financial shares pressured Wall Street.
Oil recouped some of the previous session's heavy sell-off, on the growing prospect of OPEC and allied producers cutting output at a meeting next month to prop up the market.
U.S. crude <CLc1> rose 1.53 percent to $56.54 per barrel and Brent <LCOc1> was last at $66.56, up 1.66 percent on the day. Benchmark Brent has fallen more than 20 percent since early October on concerns about excess supply and slowing demand.
"Maybe some of the fears of extra supplies and reduced demand have finally been priced into the market, but I wouldn't say that a bottom has set in yet," said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut.
Opening gains for the major U.S. stock indexes had disappeared by the afternoon.
The Dow Jones Industrial Average <.DJI> fell 193.61 points, or 0.77 percent, to 25,092.88, the S&P 500 <.SPX> lost 21.91 points, or 0.80 percent, to 2,700.27 and the Nasdaq Composite <.IXIC> dropped 60.61 points, or 0.84 percent, to 7,140.27.
Financial shares <.SPSY> dropped 1.8 percent, while the technology sector <.SPLRCT> fell 1.0 percent, continuing its decline since October, as Apple <AAPL.O> shares dropped for a fifth straight session.
U.S. stocks initially got a boost from data showing U.S. consumer prices increasing in line with expectations.
The pan-European STOXX 600 index <.STOXX> lost 0.60 percent.
European shares hit their lowest in two weeks in a broad-based sell-off across oil, mining, technology and banking stocks amid renewed worries about a global economic slowdown and Italy's budget crisis.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.10 percent, set for its fifth straight daily decline.
In currency trading, the euro rose as traders monitored the latest developments between the European Union and Britain on the latter's departure from the economic bloc and Italy's resubmission of its 2019 budget.
The dollar index <.DXY> fell 0.06 percent, with the euro <EUR=> down 0.03 percent to $1.1286.
U.S. Treasury yields reversed course and fell as investors fretted that renewed weakness on Wall Street could be signalling much deeper problems in the world's largest economy.
Benchmark 10-year Treasury notes <US10YT=RR> last rose 10/32 in price to yield 3.1104 percent, from 3.145 percent late on Tuesday.
(Additional reporting by Devika Krishna Kumar and Gertrude Chavez-Dreyfuss in New York; Editing by Matthew Mpoke Bigg, Tom Brown and Dan Grebler)