Stocks claw higher on Wall Street, oil prices regain ground

Stocks around the world are clawing higher on Wednesday, and the S&P 500 climbed toward its first gain of what’s been a dismal week. Even the oil market turned higher. Prices for crude have been turned upside down because of how much extra oil is sloshing around following a collapse in demand. After zig-zagging overnight, U.S. oil prices jumped 21% after President Donald Trump threatened the destruction of any Iranian gunboats that harass U.S. Navy ships, raising the possibility of a drop-off in oil supplies. The S&P 500 rose 2% in early trading, following milder gains in Europe.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:

The price of oil remained under pressure on Wednesday after crashing over the past week, while stocks were stable as investors sought clues about the coronavirus pandemic’s mounting economic impact.

After falling by almost 50% in the past five days, the price of U.S. oil was down another 5 cents at $11.52 a barrel, highlighting concerns about a glut of supply, a lack of storage space in the U.S. and crashing demand for energy around the globe.

The volatility in oil markets weighed heavily this week on stock markets, which recovered their poise on Wednesday. European indexes were up by almost 1% after Asia largely closed higher, while Wall Street futures pointed to moderate gains on the open.

The plunge in oil prices “has stirred wider concerns of a sharp economic slowdown,” analyst Hayaki Narita of Mizuho Bank said in a report.

On Monday, the price of a U.S. barrel to be delivered next month fell to below zero. That meant traders were paying others to take it off their hands so they wouldn’t need to find places to store the swelling surplus.

The international benchmark for oil, Brent, has also dropped sharply, though it has been spared the extreme volatility of the U.S. contract as its storage does not depend on U.S. facilities to the same extent. It was down 3 cents at $19.30 a barrel, having traded at $28 just last week.

In stock markets, London’s FTSE rose 1.3% to 5,714 and the DAX in Frankfurt gained 0.8% to 10,3331. The CAC 40 in France added 0.4% to 4,373.

In the U.S., futures for the benchmark S&P 500 index and Dow Jones Industrial Average rose 1%. On Tuesday, the S&P 500 fell 3.1% and the Dow lost 2.7%.

In Asia, Tokyo’s Nikkei 225 fell 0.7% to 19,137.95. The Shanghai Composite Index closed up 0.6% at 2,843.98 after spending the day swinging between gains and losses.

The Hang Seng in Hong Kong added 0.4% to 23,893.36. The Kospi in Seoul rose 0.9% to 1,896.15 and Sydney’s S&P-ASX 200 was unchanged at 5,221.20. India’s Sensex rose 1.8% to 31,177.71. New Zealand’s main index rose 1.1% and Jakarta gained 1.5%. Singapore was down 0.2%.

“Global markets are struggling mightily with a temporary but overwhelming demand drop,” said Stephen Innes of AxiCorp in a report.

Treasury yields fell further, indicating investors were shifting more money into bonds as a safe haven. The yield on the 10-year Treasury, or the difference between the market price and what a buyer will be paid if a bond is held to maturity, dropped to 0.58% from 0.62% late Monday.

Also Tuesday, the U.S. Senate approved a virus aid bill worth nearly $500 billion. It would provide more loans to small businesses and aid to hospitals.

Georgia’s governor, meanwhile, announced plans late Monday to allow gyms, hair salons and other businesses to reopen as early as Friday.

Still, economic data are bleak. A report Tuesday showed the steepest drop for U.S. sales of previously occupied homes since 2015.

Pessimists say the market’s rally has been overdone and that a premature reopening of the economy could lead to only more flareups of infections.

The dollar declined to 107.64 yen from Tuesday’s 107.68 yen. The euro gained to $1.0870 from $1.0853.

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