NEW YORK (Reuters) - World equity markets and oil prices rebounded on Friday in a relief rally after a sell-off this week that was triggered by signs of sluggish global growth.
A lockdown and citywide search for a suspect in the Boston Marathon bombing after another suspect was killed did not appear to have an impact on prices, although trading volume may have suffered at bit. Boston is a major U.S. financial center.
Brent crude oil stabilized above $99 a barrel in a second day of gains, while stocks on Wall Street and in Europe advanced in a market still rattled by global demand concerns.
Stocks sold off earlier in the week on recent weak economic data and a plunge in commodity prices. The major European and U.S. indices posted their worst weekly performances this year.
The S&P 500’s close below the 50-day moving average on Thursday suggested the medium-term uptrend in the market could be in peril. The last time the index closed consecutive days under its 50-day average was in early December.
Volume initially appeared subdued because of this week’s sell-off and as no U.S. economic data was released on Friday. Equity turnover of 6.4 billion shares was in line with this year’s daily average, but low for a day in which options expired.
Wall Street’s advance was a reaction to the recent declines more than anything, according to Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
“It’s a relief rally after the last couple of days,” he said.
Despite the sell-off, the S&P is still up about 9 percent for the year and the pullback could lead investors to re-evaluate their positions, said Michael Sheldon, chief market strategist at RD Financial in Westport, Connecticut.
“Unless there’s a shock to the system, investors will move back into the market as we head through earnings season, but now investors have an opportunity to study the winners and losers more closely,” Sheldon said.
Marquee tech names bolstered the market and drove the Nasdaq up more than 1 percent, a day after Google Inc and Microsoft Corp (MSFT.O) posted strong earnings. Google closed just shy of $800 a share.
The Dow Industrials traded down for much of the session, hurt by a rare quarterly earnings miss from International Business Machines Corp (IBM.N). Three brokerages cut their price targets for the company, whose shares fell 8.3 percent to $190.00 and weighed heavily on the Dow, which rallied just before the close.
The Dow Jones industrial average .DJI closed up 10.37 points, or 0.07 percent, at 14,547.51. The Standard & Poor's 500 Index .SPX rose 13.64 points, or 0.88 percent, at 1,555.25. The Nasdaq Composite Index .IXIC gained 39.69 points, or 1.25 percent, at 3,206.06.
MSCI’s all-country world equity index .MIWD00000PUS, which tracks about 9,000 stocks in 45 countries, rose 0.6 percent to 355.94. For the week, the index posted its biggest percentage decline since June.
In Europe, the FTSEurofirst 300 .FTEU3 of leading regional shares rose 0.5 percent to close at 1,153.19.
The index was down 2.4 percent for the week, marred by weaker economic data from Europe’s growth powerhouse, Germany, as well as more forecast-lagging data from the United States.
The U.S. dollar extended its gains on the yen after Japanese officials in Washington said the global community understands its monetary policy is directed at domestic issues rather than currency manipulation.
The euro rose to a session high against the dollar after European Central Bank board member Jensen Weidman said interest rates in Europe are appropriate. The euro later pared gains.
The dollar rose 1.44 percent to 99.54 yen, leaving it within sight of the four-year peak of 99.95 yen reached last week.
The euro traded almost flat at $1.3048.
U.S. stock gains supported a “risk-on” trade in crude oil, sending Brent briefly above $100 a barrel. But worries about global demand and oversupply have kept a lid on the rebound.
Brent crude rose 52 cents to settle at $99.65 a barrel. U.S. crude rose 28 cents to settle at $88.01 a barrel.
“This remains a market very much driven by the equity markets. They’ve been rebounding and we’re just knocking along with that,” said Kyle Cooper, managing director of research at IA Advisors in Houston.
“Crude inventories are at an all-time high, but we’re up today,” he added. “There are some people who want to believe it’s a physical market, but it’s not. It’s a financial market.”
The benchmark 10-year U.S. Treasury note was down 6/32 in price to yield 1.7049 percent.
Additional reporting by Marc Jones in London; Reporting by Herbert Lash; Editing by Dan Grebler, James Dalgleish and Nick Zieminski