CHK Chesapeake Energy Corporation

By Riva Gold 

Stocks ticked higher Thursday as a recovery in oil prices helped reverse early losses in the energy sector.

The Stoxx Europe 600 erased morning declines to rise 0.4%, led by gains in defensive stocks such as utilities and food and beverage companies.

Futures pointed to a 0.2% opening gain for the S&P 500, which closed Wednesday slightly shy of its all-time high reached last week.

Even as global growth remains low, the feeling in the market is that "there's no other alternative but to remain invested," said Charles Hepworth, investment director at GAM.

Central banks are continuing to ease their policy, he said, which has helped support stocks and sentiment toward risk.

In premarket trading, shares in Chesapeake Energy Corporation were up over 7% after the oil and gas producer agreed to pay nearly $340 million to exit the Barnett Shale in Texas.

Most energy and mining stocks retreated, however, as volatile oil prices took their toll. Brent crude oil was last up 0.4% at $44.23 a barrel after falling below $43.50 earlier in the day. Signs of continued growth in U.S. crude stocks and record output from Saudi Arabia have depressed oil prices, which are down around 6% in the past month.

London's FTSE 100 Index fell 0.2%, pressured by the earlier fall in oil prices and a large number of companies going ex-dividend, which tends to depress shares.

Earlier, oil price declines had weighed on stocks in Asia. Australia's S&P/ ASX 200 shed 0.6%, while the Shanghai Composite Index lost 0.5% after falling oil prices sent Wall Street to a lower close on Wednesday.

Stocks in Hong Kong, however, rose on reports that the Shenzhen-Hong Kong exchange trading link, which could channel cash into Hong Kong stocks, will be started soon. Markets in Japan were closed for a holiday.

Elsewhere, New Zealand's central bank lowered its main interest rate to a record-low 2% on Thursday and signaled further cuts were likely, but the kiwi dollar spiked against the greenback as markets had anticipated a more dramatic cut.

The dollar was otherwise slightly firmer, inching up 0.3% against the euro and 0.2% against the yen.

In bonds, the yield on the 10-year U.S. Treasury note inched up slightly to 1.520% following two sessions of declines. Yields move inversely to prices.

Ten-year U.K. government debt last yielded 0.546% after some short-dated gilts briefly returned to negative territory Thursday morning.

The gilt market has driven bond yields lower across the board this week amid concerns about scarcity in the U.K.'s debt market as the Bank of England embarks on its purchase program.

"The U.K. is really defying the rest of the global bond market," Mr. Hepworth said, pushing yields to incredibly low levels.

Kenan Machado

and Kate Geenty contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

August 11, 2016 07:41 ET (11:41 GMT)

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