Crude oil pulled further away from its peak yesterday. MarketWatch reports:
Crude-oil futures slumped almost $4 Wednesday, retreating for a second day as data showed U.S. inventories fell less than expected and as concerns faded that Hurricane Dolly would pose much of a threat to energy infrastructure in the Gulf of Mexico.
Also helping crude's drop, the dollar gained ground after the U.S. Federal Reserve released its Beige Book. The latest economic report showed slowing growth, adding downward pressure on dollar-denominated commodities prices. Read Economic Report.
US stocks benefited from the fall in oil price. MarketWatch reports:
U.S. stocks on Wednesday ended modestly higher for a second consecutive day of gains as crude deepened its decline and as lawmakers drew closer to approving a plan to help troubled mortgage companies Fannie Mae and Freddie Mac...
The Dow Jones Industrial Average gained 29.88 points, or 0.3%, to settle at 11,632.38, with 21 of its 30 components trading higher...
The S&P 500 climbed 5.18 points, or 0.4%, to 1,282.18, with consumer discretionary fronting sector gains, up 2.8%, followed by financials, which advanced 2.4%...
The technology-laden Nasdaq Composite rose 21.92 points, or nearly 1%, to 2,325.88, gaining the most out of the three main stock indices.
The stock market rally was global.
In overseas trade, Asian markets rallied, with financials and transportation stocks paving the way higher. See Asia Markets.
In Europe, stocks also posted gains. Read Europe Markets.
The US dollar also rose yesterday, partly from lower oil prices and higher stocks but also from signs of weakening economies elsewhere. Again from MarketWatch:
The dollar index...was at 72.790, up from 72.486 in late North American trading Tuesday...
The yen was pressured by news that Japan's Cabinet Office lowered its economic growth forecast for the current fiscal year to 1.3% from a previous estimate of 2.0%, citing the effects of rising crude oil and other commodity prices, a stronger currency and lower U.S. demand for Japanese exports. See full story.
Europe's single currency was under similar pressure, after a larger-than-expected slip in industrial orders underlined economic worries.
Industrial orders across the 15-nation euro zone fell more than expected in May, posting a 3.5% monthly drop and a 4.4% annual decline, Eurostat reported, underlining worries about the single-currency area's economic prospects.