Oil retreats after Monday's rally; stocks gain

Tue Dec 2, 2014 5:58pm EST
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By Caroline Valetkevitch

NEW YORK (Reuters) - Oil prices resumed their downward path on Tuesday after rallying the previous session, while stocks climbed as investors snapped up beaten-down energy shares.

Brent and U.S. crude oil dropped more than 2 percent each following a deal that will add more Iraqi crude to markets and gains in the dollar. Brent crude oil is down more than 30 percent since June.

The Dow Jones industrial average closed at a record high, boosted by gains in energy shares as investors searched for bargains in the sector. The S&P energy index .SPNY, which is down 14 percent since June, jumped 1.3 percent.

"The market is sniffing out a bottom in the underlying commodity and we are seeing a bounce in energy stocks from having been oversold in the last month or so," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.

The Dow Jones industrial average .DJI rose 102.75 points, or 0.58 percent, to 17,879.55, the S&P 500 .SPX gained 13.11 points, or 0.64 percent, to 2,066.55 and the Nasdaq Composite .IXIC added 28.46 points, or 0.6 percent, to 4,755.81.

MSCI's global share index .MIWD00000PUS was up 0.3 percent, while European shares .FTEU3 ended up 0.5 percent. Emerging market shares tracked by MSCI .MSCIEF lost 0.1 percent, with Brazil's Bovespa index .BVSP down 1.3 percent.

Giving the Nasdaq its biggest boost, shares of Biogen Idec (BIIB.O: Quote) jumped 6.4 percent to $328.27 after favorable data from the Phase III trial of its Alzheimer's drug. The Nasdaq biotech index jumped 2.1 percent.

In the energy market, benchmark Brent crude oil LCOc1 fell $2.00, or 2.8 percent, to settle at $70.54 a barrel, while U.S. crude CLc1 fell $2.12, or 3.1 percent, to settle at $66.88. On Monday, the market had its biggest rally in two years.   Continued...

A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013.  REUTERS/Carlo Allegri