Record-breaking S&P 500, Dow rally stalls on oil drop

By Sam Forgione

NEW YORK (Reuters) - Major U.S. stock indexes gave back gains on Wednesday after hitting record intraday highs and European shares slipped after a plunge in oil prices pushed energy stocks lower on both sides of the Atlantic.

Oil prices plummeted more than 4 percent, crimping the record-breaking rally in U.S. shares, while European shares dipped after four straight days of gains. Investors also awaited second-quarter corporate earnings.

The S&P energy index <.SPNY> was last down 1.2 percent and the STOXX Europe 600 Oil & Gas index <.SXEP> ended 1 percent lower. The U.S. government stunned the market with a raft of bearish inventory data that added to renewed concerns over a global glut of oil.

The benchmark S&P 500 hit 2,156.45 earlier on Wednesday, topping Tuesday's intraday record of 2,155.40, while the Dow hit 18,390.16 to top Tuesday's record intraday peak, the third straight day of such peaks for the S&P and the second for the Dow.

The FTSEurofirst 300 index of top regional shares earlier touched its highest in more than two weeks for the second straight day.

Shares had advanced partly on the view that the U.S. economy was on solid footing and on the expectation that central banks in most developed economies would continue to keep interest rates at rock-bottom levels. In addition to the S&P 500 and Dow hitting record closing highs Tuesday and intraday highs Wednesday, the Nasdaq had turned positive for the first time in 2016 Tuesday.

Reduced political uncertainty in Britain and Japan had also helped shares.

"Markets are digesting their recent gains and are somewhat directionless," said Daniel Kern, chief investment strategist at TFC Financial Management in Boston.

MSCI's all-country world equity index was last up 0.55 points, or 0.13 percent, at 408.94.

The Dow Jones industrial average was last up 0.75 points at 18,348.42. The S&P 500 was down 2.64 points, or 0.12 percent, at 2,149.5. The Nasdaq Composite was down 9.13 points, or 0.18 percent, at 5,013.69.

Europe's broad FTSEurofirst 300 index closed 0.31 percent lower, at 1,326.3.

Brent crude was last down $2.15, or 4.44 percent, at $46.32 a barrel. U.S. crude was last down $1.99, or 4.25 percent, at $44.81 per barrel.

Safe-haven assets such as U.S. Treasuries, gold, and the Japanese yen rebounded after falling Tuesday. Benchmark 10-year Treasury yields were last at 1.468 percent after hitting a 1-1/2-week high of 1.531 percent Tuesday as higher yields attracted buyers.

"There's talk that people are adding to their Treasury positions, and we are continuing to see foreign buying on any type of pullbacks," said Mary Ann Hurley, vice president in fixed income trading at D.A. Davidson in Seattle.

The dollar was last down 0.44 percent against the yen at 104.23 yen after hitting a more than two-week high of 104.97 yen on Tuesday.

Spot gold recovered from its lowest in nearly two weeks, and was last up 0.83 percent at $1,342.26 an ounce.

(Additional reporting by Karen Brettell in New York and Yashaswini Swamynathan in Bengaluru; Editing by James Dalgleish and Nick Zieminski)