US and European stock prices rose on hopes the European Central Bank would embark on more stimulus soon to avert deflation in the euro zone, while oil prices showed no sign of rebounding from their lowest levels since 2009.
Crude oil prices have fallen 50 percent since mid-2014, tipping monthly euro zone inflation into negative territory for the first time since 2009. The European statistics office estimated that prices were down 0.2 percent in December from a year earlier.
As a result, investors are growing more hopeful that the ECB might roll out a bond-buying program to prevent a downward price spiral. Those expectations have helped knock the euro to a nine-year low and bond yields in several euro zone members to record lows.
The FTSEurofirst 300 index of top European shares jumped as much as 1 percent after three losing sessions. It closed up 0.5 percent at 1,330.20 points.
The rebound in European shares, together with positive jobs and trade data, revived Wall Street with the Standard & Poor’s 500 snapping a five-day losing streak, the longest in about 13 months.
The Dow Jones industrial average ended up 211.79 points, or 1.22 percent, to 17,583.43, the S&P 500 closed up 23.24 points, or 1.16 percent, to 2,025.85 and the Nasdaq Composite finished up 57.73 points, or 1.26 percent, to 4,650.47.
Tokyo’s Nikkei ended flat at 16,885.33.
The MSCI world equity index, which tracks shares in 45 nations, rose 0.61 percent, to 406.51.
The ECB meets on Jan. 22 but may be reluctant to act aggressively before Greece’s general election on Jan. 25. There has been speculation that the country might move to exit the euro zone if the left-wing Syriza party wins.
The oil market remained depressed. Brent crude slid more than 2 percent early, dipping below $50 a barrel for the first time since early 2009 before bouncing up to just over $51.
It finished up 5 cents or 0.1 percent at $51.15 a barrel, while US crude futures settled up 72 cents or 1.50 percent at $48.65.
The euro fell as low as $1.18085 , the lowest since 2009. It last traded at $1.1842, down 0.4 percent on the day on the EBS trading system.
The dollar also rose against the yen, rebounding from early losses. It was last up 0.6 percent at 119.13 yen, which was about 2.7 yen below a seven-year peak set in December.
The greenback, like stocks, climbed on encouraging data on US trade and private job growth and an initial rise in US yields
Source: Buenos Aires Herald