Crude oil prices fell sharply on Wednesday as signs of a slowdown in China and Europe stoked worries about petroleum demand, while the dollar rose after better-than-expected news on the U.S. economy.
Wall Street ended modestly higher as better-than-expected U.S. labor and service-sector data fueled optimism about the recovery, but the Dow industrials were hobbled by a slide in Hewlett-Packard .
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The euro zone's economic woes worsened last month and China's slowdown looked likely to extend to a seventh quarter, suggesting recent bold actions by global central banks have yet to convince consumers to start spending again.
The concerns about China and Europe overshadowed supportive data from U.S. Energy Information Administration's (EIA), which showed an unexpected fall in U.S. crude stocks last week.
"The global economy is in a rut, and even with supportive EIA data crude is down," said Dan Flynn, an analyst at Price Futures Group in Chicago.
Brent November crude futures lost $3.40 to settle at $108.17 a barrel. U.S. November crude shed $3.75 to settle at $88.14 a barrel�� and dropped to $87.70 in post-settlement trading, its lowest since August 3.
On Wall Street, the Dow Jones industrial average ended up 12.25 points, or 0.09 percent, to 13,494.61. The Standard & Poor's 500 Index closed up 5.24 points, or 0.36 percent, to 1,450.99. The Nasdaq Composite Index gained 15.19 points, or 0.49 percent, to 3,135.23.
The pace of growth in the vast U.S. services sector, which dominates the country's economy, picked up in September, while private employers added more jobs last month than expected, industry reports showed.
The data came ahead of the first of three presidential debates Wednesday night in Denver and the government's closely watched monthly payrolls report on Friday.
"The ADP numbers were good and the services index was good, but we are missing the big catalyst to keep the market up," said Jack De Gan, principal and senior advisor at Harbor Advisory in Portsmouth, New Hampshire.
"The next big catalyst will be Friday's employment numbers if we don't get any news out of Europe on the progress of Spain's bailout before that."
The S&P's consumer discretionary sector index rose 0.8 percent. It was the best-performing S&P 500 sector, helped by stocks like Amazon , up 2.1 percent at $255.92, and homebuilders like PulteGroup , up 6 percent at $16.50.
Shares of Hewlett-Packard dropped sharply after the company warned on Wednesday of a darker outlook for 2013 earnings, reflecting slow progress on CEO Meg Whitman's turnaround plan. Its stock fell to a nine-year low.
The MSCI global stock index <.MIWD00000PUS> dropped 0.1 percent to 333.19. The FTSEurofirst-300 index of pan-European shares <.FTEU3> slipped 0.1 percent to end at 1,100.84 points.
The dollar rose to a two-week high against the yen. The latter was pressured after Japan's newly appointed Finance Minister Koriki Jojima said he is ready to take steps to thwart a strong yen, which has hurt exports and the economy.
Against the yen, the dollar rose as high 78.58 yen, its highest since September 19. It was last at 78.51 yen, up 0.5 percent on the day.
The euro lost 0.1 percent to $1.2900.
Spain's prime minister, Mariano Rajoy, on Tuesday quashed speculation the country could apply for a bailout as soon as this weekend, but expectations are high that Spain will eventually request aid.
Signs of a slowdown in China weighed on metals prices, with copper down after four days of gains. China accounted for 40 percent of refined copper demand last year.
Benchmark copper on the London Metal Exchange traded at $8,290 a tonne, down from Tuesday's close of $8,325.50. The metal, which is used in power and construction, had gained more than 2 percent over the past four sessions.
Gold edged up, defying a drop in crude oil and a firmer dollar, as the encouraging U.S. data bolstered bullion's investment appeal as an inflation hedge.
Spot gold was up slightly at $1,777.39. Prices hit $1,791.20 earlier this week, their highest since last November.
The benchmark 10-year U.S. Treasury note was up 1/32, with the yield at 1.6146 percent.
(Additional reporting by Robert Gibbons, Angela Moon and Steven C. Johnson; Editing by Bob Burgdorfer)