Global shares, oil rebound after week's big sell-off

NEW YORK: World equity markets and oil prices rebounded on Friday in a relief rally after a sell-off this week that was triggered by signs of sluggish global growth.

A lockdown and city-wide search for a suspect in the Boston Marathon bombing after another suspect was killed may have contributed to reduced trading volumes but did not appear to have an impact on prices.

Brent crude oil stabilized above $99 a barrel in a second day of gains, while stocks on Wall Street and in Europe advanced as bargain-hunters snapped up shares in a market still rattled by global demand concerns.

Stocks have sold off on recent weak economic data and have been pressured by a plunge in commodity prices. European indices posted their worst week this year and the U.S. benchmark S&P 500, down 3 percent the past four sessions, was on track to do the same.

The S&P 500's close below the 50-day moving average on Thursday indicated the medium-term uptrend in the market could be in peril. The last time the index closed consecutive days under its 50-day average was in early December.

Volume was subdued because of this week's sell-off and because no U.S. economic data was released on Friday.

"A lot of folks in Boston are out of the market and anyone not in Boston is stuck watching the TV trying to find out what's going on there," said Brad Bechtel, managing director at foreign exchange brokerage Faros Trading in Stamford, Connecticut.

The market's advance is a reaction to the recent declines more than anything, according to Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

"It's a relief rally after the last couple of days," he said.

The Dow was pulled lower by a rare quarterly earnings miss from International Business Machines Corp (IBM.N). Three brokerages cut their price targets for the company, and its shares fell 7.4 percent to $191.79, contributing a negative 117 points to the Dow.

But some marquee tech names bolstered the broader market and drove the Nasdaq up more than 1 percent, a day after strong earnings from Google Inc (GOOG.O) and Microsoft Corp (MSFT.O).

The Dow Jones industrial average .DJI was down 22.80 points, or 0.16 percent, at 14,514.34. The Standard & Poor's 500 Index .SPX was up 10.14 points, or 0.66 percent, at 1,551.75. The Nasdaq Composite Index .IXIC was up 36.63 points, or 1.16 percent, at 3,203.00.

MSCI's world share index .MIWD00000PUS, which tracks about 9,000 stocks in 45 countries, was up 0.5 percent at 355.71.

In Europe, the FTSEurofirst 300 .FTEU3 of leading regional shares rose 0.5 percent to close at 1,153.19.

The index was down 2.5 percent for the week, marred by weaker economic data from Europe's growth powerhouse, Germany, as well as more forecast-lagging data from the United States.

The U.S. dollar and euro rallied more than 1.0 percent versus the yen after Japan said the Group of 20 countries did not oppose its aggressive monetary easing aimed at beating deflation rather than weakening the currency.

The euro rose to a session high against the dollar after European Central Bank board member Jens Weidmann said interest rates in Europe are appropriate.

The dollar rose 1.04 percent to 99.15 yen, leaving it within sight of the four-year peak of 99.95 yen reached last week.

The euro rose 0.14 percent to $1.3068.

U.S. stock gains supported a "risk-on" trade in crude oil, sending Brent briefly above $100 a barrel. But worries about global demand and oversupply have kept a lid on the rebound.

Brent crude was up 31 cents to $99.44 a barrel. U.S. crude rose 31 cents to $88.04 a barrel.

"This remains a market very much driven by the equity markets. They've been rebounding and we're just knocking along with that," said Kyle Cooper, managing director of research at IAF Advisors in Houston.

"Crude inventories are at an all-time high, but we're up today," he added. "There are some people who want to believe it's a physical market, but it's not. It's a financial market."

The benchmark 10-year U.S. Treasury note was down 7/32 in price to yield 1.7083 percent. (Reuters)