NEW YORK: Increasing bets that growth in Europe will slow as the United States begins to recover propelled gains in the dollar and drove oil to a more than three-month low yesterday, lifting stocks on both sides of the Atlantic.
The dollar rose to a six-month high against the euro, driving gold and other metals prices lower, along with oil, and bolstering the outlook for economic growth and profits among US equity investors. Oil dropped to a more than three-month low below $112 a barrel, pressured by faltering global demand, rising supply and a stronger dollar.
US stocks rose in choppy trade. Before 1 p.m., the Dow Jones Industrial Average was up 37.94 points, or 0.33 percent, at 11,653.87. The Standard & Poor’s 500 Index was up 4.95 points, or 0.38 percent, at 1,297.88. The Nasdaq Composite Index was up 3.27 points, or 0.13 percent, at 2,456.94. European shares also gained. The FTSEurofirst 300 index of top European shares closed 0.39 percent higher at 1,190.25 points, but lost 0.8 percent over the week.
The dollar was on track for a fifth week of gains against the euro, amid signs the US economic slowdown may be bottoming while growth in the euro zone stalls.
The dollar has rallied broadly, rising more than 5 percent against the euro in August, as the view on the global economy’s ability to withstand a US-initiated downturn shifts.
The dollar rose against major currencies, with the US Dollar Index up 0.72 percent at 77.213. Against the yen, the dollar was up 0.67 percent at 110.46. The euro was down 0.95 percent at $1.4666.
Oil prices fell to the $111 level yesterday after OPEC predicted world demand for energy will keep falling. Light, sweet crude for September delivery fell $3.26 to $111.75 a barrel on the New York Mercantile Exchange, after earlier falling to $111.34, its lowest since May 2 and more than $35 — or 24 percent — below oil’s July 11 trading record above $147.
In its monthly oil report, the Organization of the Petroleum Exporting Countries forecast world appetite for oil this year overall will fall by 30,000 barrels a day. While forecasting demand growing by a daily 1 million barrels a day this year, and another 900,000 barrels in 2009, the report noted that world demand growth next year will also be “the lowest since 2002,” with demand growth from the major industrialized countries actually declining.
