Oil firms after data; Brexit, Fed give dollar support

NEW YORK (Reuters) - Stocks rose slightly on Wall Street on Wednesday and a global equities index ticked lower, while crude futures hit a nine-day high after a smaller-than-expected build in U.S. inventories.

An employee pumps petrol into a car at a petrol station in Hanoi, Vietnam December 20, 2106. REUTERS/Kham

The U.S. dollar rose with support from remarks by various Federal Reserve officials. Chicago Fed President Charles Evans said he favors further interest rate hikes this year, while Boston Fed President Eric Rosengren said the Fed should raise rates three more times in 2017.

Weighing on the euro and pound, Prime Minister Theresa May formally began Britain’s divorce from the European Union, a decision pitching her country into the unknown.

On Tuesday, the Scottish Parliament backed a bid to hold an independence referendum that could break up the UK, adding another layer of uncertainty for investors.

Gains in the energy sector .SPNY, up 1.22 percent, kept the S&P 500 afloat, while the Dow fell for the ninth session of the last 10. Traders continue to assess the execution risk from a Trump administration that failed to pass its first major piece of legislation despite holding majorities in both chambers of Congress.

“The policy risk has increased ... but economic data still remains solid and therefore earnings should be good,” said Walter Todd, chief investment officer of Greenwood Capital in Greenwood, South Carolina. “Absent some revelation on the policy front, I think (earnings are) the next catalyst for the market.”

The Dow Jones Industrial Average .DJI fell 42.18 points, or 0.2 percent, to close at 20,659.32, the S&P 500 .SPX gained 2.56 points, or 0.11 percent, to 2,361.13 and the Nasdaq Composite .IXIC added 22.41 points, or 0.38 percent, to 5,897.55.

It was among the lightest trading volume days on Wall Street so far this year.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.39 percent. MSCI's gauge of stocks across the globe .MIWD00000PUS was down less than 0.1 percent. Emerging market stocks .MSCIEF rose 0.16 percent.


The dollar index .DXY gained 0.24 percent, with the euro EUR= down 0.43 percent to $1.0766. On Tuesday, the index posted its largest daily percentage increase since March 1.

Sterling hit a one-week low of $1.2375 GBP= earlier, and was last trading at $1.2432, down 0.13 percent.

“Sterling will be incredibly sensitive to (Brexit) negotiations, and will offer a clear gauge of how things are panning out. We could see it move lower still if negotiations take a sour turn - $1.10 is feasible,” said Neil Wilson, senior markets analyst at ETX Capital.

Benchmark U.S. Treasury yields fell after the 10-year note yield hit a session high at 2.427 percent, higher than Tuesday's. Ten-year notes US10YT=RR were last up 8/32 in price to yield 2.3801 percent.

Oil prices rose after U.S. gasoline stockpiles dropped sharply last week, while crude inventories grew less than anticipated.

U.S. crude CLc1 was last up 2.5 percent to $49.56 a barrel and Brent LCOc1 traded at $52.42, up 2.1 percent on the day.

Spot gold XAU= rose 0.1 percent to $1,252.91 an ounce. U.S. gold futures GCcv1 fell 0.2 percent to $1,252.80 an ounce.

Reporting by Rodrigo Campos; Additional reporting by Dion Rabouin, David Gaffen, Lewis Krauskopf and Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski and James Dalgleish