World stocks rise, biotechs rebound; oil snaps three-day rally
By Caroline Valetkevitch
NEW YORK (Reuters) - World stock indexes rose on Wednesday with a rebound in biotechnology shares boosting U.S. equities, while oil prices snapped a three-day rally after U.S. data showed a large inventory build.
The S&P 500 hit its highest in three weeks, but concern about corporate earnings just ahead of the U.S. third-quarter reporting season kept trading choppy. Reduced profit forecasts from Adobe Systems (ADBE.O: Quote) and Yum Brands (YUM.N: Quote) late Tuesday added to gloom about the earnings picture.
Oil prices struggled to extend their recent rally as U.S. government data showed domestic crude inventories rose 3.1 million barrels last week, more than forecast.
The U.S. dollar rose against the euro EUR=EBS and the Swiss franc CHF=EBS, while the yen gained against the dollar after the Bank of Japan left monetary policy unchanged. The dollar was last down 0.24 percent against the yen at 119.950 yen JPY=EBS.
Although the Bank of Japan held off on expanding stimulus on Wednesday, expectations are growing of more support rather than less as worries mount over a global economic slowdown. This week, the International Monetary Fund again cut its global growth forecast.
The potential for more stimulus from the European Central Bank and the Bank of Japan has contributed to a backdrop of accommodative central bank policy, along with expectations that a Federal Reserve rate increase will remain on hold until 2016.
On Wall Street, the S&P 500 health care index .SPXHC was up 1.5 percent, in the biggest boost to the S&P 500, while the Nasdaq Biotech Index climbed 2 percent after recent steep losses.
"On days where investors are looking for fallen angels, healthcare helps fill that equation today," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "What was a drag over the past few days is now the leader." Continued...