Oil rebound buoys Wall St; bonds, gold erase gains
By Rodrigo Campos
NEW YORK (Reuters) - A sharp rebound in crude prices lifted stocks on Wall Street on Wednesday in a late rally, but a gauge of equities across the globe closed lower on lingering concern about economic growth.
Crude turned higher after data showed U.S. gasoline demand spiked and the S&P 500 climbed steadily after that, ending 2 percent above its session low.
"You have a tremendous amount of underperformance out there in the hedge fund community," said Ian Winer, director of trading at Wedbush Securities in Los Angeles. "When the market starts to turn, it starts to feed on itself because people can't afford to miss out on a rally."
Other assets, like Treasuries and gold, reversed course after the bounce in crude.
"As much as it frustrates people, the reality is (oil and equities) are incredibly highly correlated and they have been really going back to November," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin.
The Dow Jones industrial average .DJI rose 53.21 points, or 0.32 percent, to 16,484.99, the S&P 500 .SPX gained 8.53 points, or 0.44 percent, to 1,929.8 and the Nasdaq Composite .IXIC added 39.02 points, or 0.87 percent, to 4,542.61.
The 14-day correlation between the S&P 500 and U.S. crude stands at 0.93, just below the 3-1/2 year high hit earlier this month.
The bounce in the S&P contrasted with a fall in European stocks, which were weighed by energy and commodity sector names. The pan-European FTSEurofirst 300 share index .FTEU3 fell 2.3 percent and MSCI's gauge of stocks globally .MIWD00000PUS fell 0.5 percent. Continued...