US stocks rebound after losses

US and European equities rebounded on Wednesday after a string of heavy losses that had been stoked by fears over a weakening global economy, but worries about the economy continued to dog oil prices, which fell for a third straight day. Investors scaled back on holdings of safe-haven of gold and US and German government debt as they tiptoed back into riskier investments. Record low auction yields for Germany\'s new 10-year bond compounded the sell-off in Treasuries and Bunds. The ultra-low yields soured demand for the euro zone benchmark despite fears that Spain or another heavily indebted euro zone nation might need a bailout. But the euro managed to strengthen against the dollar after a member of the European Central Bank\'s Executive Board said the bank\'s bond-buying program remains an option as the euro zone continues to struggle to contain its debt crisis. \"The market action today tells you how sensitive investors are to yield levels and positive comments from the ECB, even though the central bank\'s comments were somewhat vague,\" said Steven Englander, head of G10 strategy at CitiFX, a division of Citigroup. \"At the end of the day it seems clear that policymakers are very interested in keeping the asset market rally going and will do what is needed.\" In equity markets, Wall Street stocks bounced back after five days of sharp losses. In late morning trading, the Dow Jones Industrial Average was up 90.48 points, or 0.71 percent, at 12,806.41. The Standard & Poor\'s 500 Index was up 11.98 points, or 0.88 percent, at 1,370.57. The Nasdaq Composite Index was up 33.96 points, or 1.14 percent, at 3,025.18. The S&P had marked its largest daily percentage decline in four months on Tuesday. It ended below its 50-day moving average for the first time since December, a level that provided technical resistance in Wednesday\'s rebound. \"I see it as normal for the market to take a break after its best first quarter since 1998. If that\'s the only blip we see, it was pretty shallow,\" said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston. Shares of aluminum producer Alcoa Inc. rose 7 percent to $9.968, a day after the Dow component surprised Wall Street by reporting a first-quarter profit. \"I don\'t think Alcoa earnings are going to set the tone and turn this around, but earnings expectations have been raised a bit, analysts had gotten a bit too pessimistic,\" Zaro said. US-traded shares of Nokia tumbled 14 percent after the mobile phone maker warned its phone business would post losses in the first two quarters this year, as it struggles to revamp its product line. Year-to-date, the S&P is up 9.1 percent, the Dow is up 4.98 percent and the Nasdaq is up 16.2 percent. The FTSEurofirst 300 index of top European shares unofficially closed 0.6 percent higher at 1,032.54 points, after losing 5.4 percent in four sessions. Shares in euro zone banks led the rebound, with Intesa SanPaolo up 5.5 percent and Commerzbank up 3.8 percent. The banking sector index had tumbled 21 percent in three weeks, hammered by the return of fears over the region\'s sovereign debt crisis. \"It\'s just a short-term technical bounce after a brutal drop. The fact is that everything has been broken on charts: Trendlines, channels, 200-day moving averages,\" said David Thebault, head of quantitative sales trading at Global Equities in Paris. The recovery in US and European shares boosted the MSCI global stock index, snapping a six-session losing streak. It was up 0.55 percent, after Tuesday\'s 1.5 percent decline. In Tokyo, the Nikkei fell 0.8 percent to its lowest level since mid-February, following Tuesday\'s sell-off on Wall Street and in Europe. Benchmark 10-year Treasury notes last traded down 12/32 in price with a yield of 2.03 percent. The 10-year note yield on Tuesday fell below the key chart level of 2.00 percent for first time in about four weeks. German Bund futures were down 66 basis points at 139.67, reversing half of Tuesday\'s gains. In the currency market, the euro rose 0.3 percent versus the dollar to $1.3120 after touching a near one-month low of $1.3033 on Monday. Against the yen, it was up 0.7 percent at 106.28 yen after earlier touching 105.42, the lowest level in almost seven weeks. The dollar also weakened against other major currencies. The dollar index shed 0.24 percent at 79.704, rebounding from an earlier low of 79.508. In oil trading, Brent crude slipped below $120 a barrel, pressured by rising U.S. inventories as well as concern about the strength of global demand. Brent futures for May delivery were last down 23 cents at $119.65 a barrel after touching a near two-month low of $119.05 earlier. US oil futures were up $1.15 at $102.19. Spot gold fell for first time in five sessions. It was last down 0.11 percent at $1,658.50 an ounce.