NEW YORK Brent crude fell below $100 a barrel on Tuesday for the first time in nine months as continued concern about the global economy weighed on the outlook for demand, while gold and U.S. stocks rebounded after a recent sell-off lured buyers back.
The broad rout in commodities and stocks seen in recent sessions was triggered by data from China and the United States that raised worries about the strength of the global recovery.
Those fears continued to weigh on oil on Tuesday, with Brent crude down 72 cents at $99.91 a barrel. U.S. crude recovered earlier losses to settle at $88.72, up 1 cent.
"We are still seeing some weakness in price, in contrast to a number of markets that are snapping back to the upside with more vigor. That's because we still have a lot of oil," said Tim Evans, an energy futures specialist at Citi Futures Perspectives in New York.
"I think what we're seeing is a shift in the oil markets' focus to its own fundamentals, rather than trying to pretend that the oil market is the equity market, or a currency market."
U.S. stocks gained more than 1 percent, supported by strong earnings from some of America's biggest companies and on expectations the Federal Reserve will continue to provide stimulus.
"It's a relief rally, and investors ... are looking, as they have after any pullback we've had in the past several months, to take advantage of it and buy," said Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio.
Gold bounced after plunging more than 8 percent on Monday. Spot gold initially dropped further, to $1,321.35 an ounce, before reversing direction to gain 1.5 percent to $1,372.90.
Gold has fallen about 20 percent so far this year after an unbroken 12 years of gains and is down some 28 percent from the record high hit in September 2011 of $1,920.30 an ounce.
Analysts have cited various reasons for gold's latest slump, including funds switching out of bullion and the possibility that other central banks in Europe could use Cyprus's bailout plans to sell excess gold reserves as a reason to offload some of their own holdings.
Data showed U.S. consumer prices dropped last month, leaving room for the Federal Reserve to keep up its economic stimulus efforts. The Fed's ultra-loose monetary policy has been one of the drivers of the stock market rally this year.
"Dovish economic data is not good in the long run, but it is certainly supportive of more Fed action," said Art Hogan, managing director at Lazard Capital Markets in New York.
A batch of strong earnings reports also drove gains on Wall Street. Coca-Cola (KO.N) reported better-than-expected profit that sent its shares up more than 5 percent to their highest level since 1998.
Shares of Johnson & Johnson (JNJ.N) touched a record high of $83.50 after the healthcare company, a Dow component, reported strong quarterly earnings.
The Dow Jones industrial average .DJI gained 157.58 points, or 1.08 percent, to 14,756.78. The Standard & Poor's 500 Index .SPX rose 22.21 points, or 1.43 percent, to 1,574.57. The Nasdaq Composite Index .IXIC climbed 48.14 points, or 1.50 percent, to 3,264.63.
Separate data showed U.S. factory output declined in March, while permits for future housing construction tumbled. Data at the start of the year had been generally upbeat, pointing to an acceleration in economic growth in the first quarter, but recent reports have suggested the recovery hit a soft patch heading into the spring.
MSCI's global share index .MIWD00000PUS, which tracks around 9,000 stocks in 45 countries, was up 0.7 percent.
However, the FTSEurofirst 300 .FTEU3 closed 0.7 percent lower after disappointing ZEW German consumer confidence numbers and a lackluster update from luxury group LVMH (LVMH.PA).
Currency markets also unwound some of the previous day's action with the yen tumbling against the dollar and euro, reversing Monday's sharp gains.
"Yesterday there was a lot of fear in the market, especially as people were watching what's going on in gold," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York. "There's a thought that maybe things were overdone in the yen cross."
The dollar rose to a session peak at 98.15 yen, according to Reuters data, and was recently up 0.8 percent at 97.54 yen. The euro rallied 2.2 percent to 128.53 yen, having hit a session peak of 128.99 yen.