A rally in U.S. shares reasserted itself, with the Dow Jones Industrial Average rising more than 150 points, as crude surged toward $ 30 a barrel amid signals from China and Europe that officials will add to stimulus if needed. Treasuries fell with gold.
American equity benchmarks sought to rebound from the lowest in at least 15 months. Investors had piled into riskier assets, boosting European equities to the biggest gain in a month and sending crude briefly above $ 30 a barrel, after the European Central Bank said it would boost stimulus as soon as March, while China's vice president said the government would intervene to tamp down market volatility. The yield on the 10-year Treasury note rose to 2.02 percent.
"I think people are starting to believe that while we may not be at an absolute bottom, we may be close," said Peter Jankovskis, who helps oversee $ 1.9 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments. "Oil has been a very strong theme, though I think certainly in months that are heavy in central bank decisions that central bank activity has to a degree overwhelmed oil."
With distress in China showing few signs of abating and oil's slump to 12-year lows fueling disinflation, ECB President Mario Draghi signaled at his briefing Thursday that additional support is available as soon as March if conditions warrant. Downside risks to the euro-area economy have increased since the year began amid financial-market turmoil that has erased more than $ 15 trillion from global equity values as markets from Japan to Germany and Brazil plunged into bear territory.
Crude's climb above $ 29 a barrel in New York provided a glimmer of relief to commodities investors battered by an oversupply in resources from oil to copper and wheat. Calling the country's market "not yet mature," China's Vice President Li Yuanchao said the government would boost regulation in an effort to avoid too much volatility. Corporate earnings may also offer clues on the robustness of the U.S. recovery, with the few companies that have reported so far mostly exceeding estimates.
"There's been a lot of fear, but the low oil price doesn't mean that demand is collapsing," said Brad McMillan, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts, which oversees $ 100 billion. "It means there's a supply imbalance and that's OK. The market is taking a good hard look at fundamentals in the U.S. and saying things aren't actually that bad after all. Look at jobs and consumer comfort, they're pretty solid."
Stocks
The S&P 500 rose 0.4 percent at 2:30 p.m. in New York. The index has fallen about 8.5 percent in 2016 and is off to its worst start to a year since the financial crisis. The gauge rose as much as 1.6 percent today after plunging on Wednesday by 1.2 percent to the lowest since April 2014.
"It's good to see a reversal, to know that there are still buyers out there when things are oversold," said Aaron Jett, vice president of global equity research at Los Angeles-based Bel Air Investment Advisors LLC. "We could always have a short term bounce but then continue to the downside.
Energy shares paced gains with a 2.4 percent advance, paring the rise as oil's gain faded. Chevron Corp. climbed 2.6 percent and Home Depot Inc. surged 4.2 percent as energy and consumer discretionary companies paced the rebound from yesterday's selloff. Banks also bounced, with Wells Fargo & Co. up 2 percent. Verizon Communications Inc. gained 3.5 percent after its profit beat estimates. Union Pacific Corp. fell 4.9 percent after its earnings missed forecasts.
The Stoxx 600 climbed 1.9 percent for its best gain since Dec. 23. A weakening euro boosted exporters and commodity producers.
Emerging Markets
The MSCI Emerging Markets Index fell 0.2 percent, poised for the lowest close since May 2009. The gauge is down 13 percent this year and trades at 10.1 times its 12-month projected earnings, the least since March 2014.
Brazil's real sank to a four-month low and bond traders priced in faster inflation after the central bank's surprise decision to keep interest-rates unchanged raised questions about the institution's independence.
Bonds
Treasuries fell, sending the yield on the 10-year note higher by five basis points to 2.03 percent as demand for haven assets waned.
European bonds climbed on the ECB comments. Italian bonds extended gains, while yields on Austrian, Belgian, French and Finnish two-year notes tumbled to records. The advance pushed Germany's 10-year yield to a level last seen before the ECB's previous policy meeting, when Draghi's package of measures underwhelmed some investors.
Currencies
The euro fell the most in almost two weeks after Draghi hinted at further monetary stimulus. While Draghi reiterated that the euro is "not a policy target," he said the ECB was conscious of the effective exchange rate. Easing typically weakens a currency, which in turn, can help stimulate growth and inflation.
The shared currency dropped 0.6 percent, the most since Jan. 11, to $ 1.0831. The dollar gained 0.6 percent to 117.66 yen.
The Canadian dollar strengthened the most in 10 months as crude-oil prices rose. The currency gained for a second day after snapping its longest-ever 13-day losing streak.
Commodities
Oil rose from its lowest close in more than 12 years as inventors tried to pick a bottom after government inventory data. Futures rose as much as 6.7 percent in New York. U.S. stockpiles climbed 3.98 million barrels last week, the Energy Information Administration said Thursday. The American Petroleum Institute reported a 4.6 million barrel gain Wednesday.
Copper advanced, leading industrial metals higher and helping miners rebound from a 12-year low. Futures for delivery in March rose 1.3 percent to $ 1.9855 a pound in New York.
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