Global stocks wobble, Crude slides and Dollar inches up

A gauge of stocks across the world pared losses on Wednesday as a rally in bank shares helped buoy Wall Street, but the outlook on earnings soured after a warning on the European auto sector and a revenue miss from IBM.

Crude futures fell for the first session in four after U.S. government data showed a much larger-than-expected build in crude inventories. WTI touched its lowest price in a month.

The U.S. dollar rose as the market awaited the minutes from the latest Federal Reserve meeting. Lower-than-expected UK inflation data weighed on sterling, which gave up the previous day's gains.

On Wall Street, IBM fell 6.2 per cent, dragging blue-chips lower a day after the company missed revenue expectations. On Tuesday, the S&P 500 posted the biggest daily gain since late March.

Stocks extended losses when oil prices fell further, but a steady climb in financial sector stocks had the S&P 500 near break-even.

"It's too early to tell if Tuesday's rally was a 'dead cat bounce' or the market setting a base," said JJ Kinahan, chief market strategist at TD Ameritrade. "We're coming off an incredible day, so it wouldn't be unusual to see some profit taking."

The Dow Jones Industrial Average fell 29.27 points, or 0.11 per cent, to 25,769.15, the S&P 500 gained 2.61 points, or 0.09 per cent, to 2,812.53 and the Nasdaq Composite dropped 3.59 points, or 0.05 per cent, to 7,641.90.

European stocks hit a one-week high in early trade but then were pulled lower by a 1.9 per cent fall in an index of auto stocks. Goldman Sachs said slow demand in China could hit earnings in the sector.

The pan-European STOXX 600 lost 0.40 per cent and MSCI's gauge of stocks across the globe shed 0.01 per cent.

Emerging market stocks rose 0.05 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.27 per cent higher, while Japan's Nikkei rose 1.29 per cent.

CRUDE SLIDES, DOLLAR INCHES UP

U.S. crude futures tumbled below $70 a barrel after data showed U.S. stockpiles rose by 6.5 million barrels, almost triple what analysts had forecast, while exports dropped.

WTI fell 2.34 per cent to $70.24 per barrel and Brent was last at $80.28, down 1.39 per cent on the day.

The euro fell 0.39 per cent to $1.1528 and Sterling was the last trading at $1.314, down 0.33 per cent on the day.

The Japanese yen weakened 0.03 per cent versus the greenback at 112.31 per dollar. The dollar index rose 0.37 per cent.

Minutes of the last Fed meeting, due Wednesday, should feed expectations of further tightening.

The Brazilian real rose against the dollar after data showed economic activity rose more than expected in August.

U.S. Treasury yields continued to trade range-bound after a massive run-up last week.

Benchmark 10-year notes last fell 4/32 in price to yield 3.1709 per cent, from 3.156 per cent late on Tuesday.

The 30-year bond last fell 6/32 in price to yield 3.3399 per cent, from 3.33 per cent late on Tuesday.

(With inputs from agencies.)