Middle East concern lifts oil prices overnight

Specialist Patrick King, center, works with traders on the floor of the New York Stock Exchange. File photo / AP

Oil rose while stocks fluctuated overnight after Saudi Arabia and its Arab Gulf allies began air strikes on Yemen, bolstering concern about disruption of supply.

Benchmark Brent climbed as much as 5.8 per cent earlier, while West Texas Intermediate futures rallied as much as 6.6 per cent.

"While thousands of barrels of oil from Yemen will not be noticed, millions from Saudi Arabia will matter," John Vautrain, who has more than 30 years of experience in the energy industry and is the head of Vautrain & Co, a consultant in Singapore, told Bloomberg. "Saudi Arabia has been concerned about unrest spreading from Yemen."

US equities pared earlier losses. In afternoon trading on Wall Street, the Standard & Poor's 500 Index was flat, while the Nasdaq Composite Index eked out a 0.03 per cent gain. The Dow Jones Industrial Average was little changed.

Gains in Intel and those of Nike, last up 1.2 per cent and 1.1 per cent respectively, outweighed declines in shares of American Express and those of Cisco, down 2.1 per cent and 1 per cent respectively.

Meanwhile, the latest reports offered further signs of strength in the US jobs market. Jobless claims fell by 9,000 to a 282,000 in the seven days ended March 21, according to a Labor Department report. It was the lowest level in five weeks.

Separately, Markit said its preliminary purchasing managers index for the service sector climbed to 58.6 in March, the highest level since September, and up from 57.1 in February.

"The good news is that claims and the services sector data suggest the economy has gained some momentum heading into the second quarter," Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania, told Reuters.

Indeed, St. Louis Federal Reserve Bank President James Bullard said US policy makers' removal of the reference to "patient" when it came to interest rates "should be interpreted as a sign of strength for the US economy."

"Now may be a good time to begin normalising US monetary policy so that it is set appropriately for an improving economy over the next two years," Bullard said in a speech in Frankfurt, Germany. "Even with some normalisation, policy will remain exceptionally accommodative."

In Europe, the Stoxx 600 Index finished the session with a 0.9 per cent slide from the previous close. Germany's DAX dipped 0.2 per cent, while France's CAC 40 Index gave up 0.3 per cent, and the UK's FTSE 100 Index slid 1.4 per cent.

UK stocks were hit by falling techs as well as London Stock Exchange group shed 5.9 per cent after Borse Dubai sold its entire stake in the company.

Shares of SanDisk tumbled, last 18.3 per cent weaker, after the company downgraded its estimates for first-quarter revenue.

"We are disappointed with our financial outlook," Chief Executive Officer Sanjay Mehrotra said in a statement. "We will work through these headwinds, leveraging our compelling product roadmap and broadening customer base."