NEW YORK (Reuters) - Oil prices rebounded on Wednesday after a steeper-than-expected drop in U.S. crude inventories, helping limit equity losses on Wall Street, while European stocks held near their highest in nearly two years.
European full-year earnings forecasts, set to be their best since 2010, and centrist Emmanuel Macron’s victory in France’s presidential election over the weekend have steadied European bourses so far this week.
The pan-European FTSEurofirst 300 index rose 0.05 percent and MSCI’s gauge of stocks across the globe gained 0.05 percent.
MSCI’s All-Country World Index was flat at 459.42.
Oil prices rose after Saudi Arabia said it would cut supplies to Asia and U.S. inventories fell more than expected. Brent crude was last up 2.6 percent to $50.02 a barrel.
In the United States, disappointing results from Dow component Walt Disney and President Donald Trump’s firing of FBI Director James Comey has given equities some pause, but Wednesday’s price action was hardly a selloff, investors said.
Trump said he fired Comey, who had been leading an investigation into the Trump 2016 campaign’s possible collusion with Russia, over his handling of the email scandal.
“The market has been unusually stable for a long period; we’ve had a long stretch of not many big moves up or down,” said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois.
“The market has been able to absorb a lot of geopolitical news, but one of these days we’ll have a big geopolitical event and we’ll have a big reaction to that.”
The Dow Jones Industrial Average fell 21.5 points, or 0.1 percent, to 20,954.28, the S&P 500 lost 0.35 points, or 0.01 percent, to 2,396.57 and the Nasdaq Composite dropped 9.06 points, or 0.15 percent, to 6,111.53.
Traders said Comey’s firing could lead to serious complications for the administration, but without a “smoking gun” that showed Comey’s firing was motivated by something other than Comey’s handling of a probe into then-Democratic presidential nominee Hillary Clinton, there was likely to be limited market reaction.
“What’s the biggest concern is how much of a distraction does it have from the White House’s and the Congress’ goals,” said Jeffrey Carbone, senior partner, Cornerstone Financial Partners, in Huntersville, North Carolina.
“How much does this distract from tax reform, repeal of (the Affordable Care Act), repatriation of assets, infrastructure spending? And it seems to be fairly muted right now.”
Measures of market volatility are at rock-bottom. The U.S. VIX index fell on Tuesday to 9.56, its lowest since late 2006.
The dollar fell 0.1 percent against a basket of major currencies after slipping on the view that political uncertainty could derail Trump’s tax reform plans.
The yen, often sought in times of market uncertainty, was last 0.1 percent higher at 113.92 to the dollar. The safe-haven Swiss franc rose against the dollar to a nearly one-month high.
Benchmark 10-year U.S. Treasury yields were down 3.1 basis points to 2.38 percent after retreating from five-week highs touched on Tuesday as investors made room in their portfolios for new issuance of government and corporate debt.
Gold rose 0.12 percent to $1,222 an ounce.
Greek 10-year yields on Wednesday fell to their lowest since its debt was restructured in 2012. Greek stocks rose for a twelfth straight session, the longest streak since 1991, bringing the country’s benchmark index close to erasing all losses it made since reopening after an emergency bourse closure in the summer of 2015.
Athens and its creditors reached a deal this month on reforms that could trigger the release of more rescue funds.
Reporting by Dion Rabouin; Additional reporting by Nigel Stephenson in London