Investing.com –After three straight days of losses on Wall Street , traders returned to floor on Tuesday after the long holiday weekend ready to buy equities in a move that initially pushed the Dow up triple-digits, though the markets pared gains as a crude inventory build squashed a rally in black gold, sending oil prices 2% lower.
At 12:37PM ET (17:37GMT), the Dow Jones gained 34 points, or 0.17%, the S&P 500 advanced 9 points, or 0.39%, while the tech-heavy Nasdaq Composite traded up 23 points, or 0.42%.
The three indices had traded around 1% higher earlier on Tuesday, with the Dow gaining 175.93 points at session highs, but news that Genscape inventory data at the Cushing hub, the key delivery point for Nymex crude, showed a build of 1,038,251 barrels in stockpiles for the week ending December 30th dampened investor sentiment.
Earlier in the session, both the barrel of West Texas Intermediate oil and London’s barrel of Brent had spiked to 18-month highs hitting an intraday peak of $55.24 a barrel and $58.38, respectively.
U.S. crude futures tumbled 2.46% to $52.40 by 12:48PM ET (17:48GMT), just off session lows of $52.26, while Brent oil sank 2.29% to $55.22, near an intraday trough of $55.39.
Prior to the release of Genscape data, investor sentiment in stocks was bullish even before the U.S. open with signs of solid factory growth in China, the U.K. and Europe that gave the global manufacturing sector a solid boost heading into 2017.
The China Caixin manufacturing purchasing managers' index (PMI), a private gauge of nationwide factory activity, rose to 51.9 in December from 50.9 in November, data released earlier showed. The figure marked the strongest upturn in Chinese manufacturing conditions since January 2013.
In the U.K., manufacturing activity registered an unexpected increase in December, hitting a 30-month high and bolstering confidence over the British economy.
Data released Monday showed that manufacturers in the single currency bloc ramped up activity at the fastest pace in more than five years.
Reports on the U.S. manufacturing sector later followed suit with Markit’s final reading of the December PMI being revised upwards to a 21-month high.
Separately, the Institute for Supply Management (ISM) reported that factory activity accelerated in December with the continued expansion also hitting a two-year high.
In other positive economic news, construction spending in the U.S. hit a 10-and-a-half-year high in November.
On the company front, focus was on U.S. automakers and their relationship with incoming President Donald Trump.
Shares in General Motors (NYSE:GM) were initially down 1% in pre-market trade after Trump accused the company of sending its Mexican made model of Chevy Cruze across the border to the U.S. and warned that the company would face a big border tax on foreign made models.
Shares later recovered, up 0.6%, as GM responded that it "builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S."
Along similar lines, shares in Ford Motor (NYSE:F) jumped more than 3% after it announced that it was cancelling plans to spend $1.6 billion on a new plant in Mexico and instead invest $700 million in expanding an existing plant in Michigan.
As part of his political campaign that won him the presidency on November 8, Trump has constantly warned that he would punish companies with high tariffs if they don’t move production to the U.S.