US, European stocks rise as oil strengthens

New York - European and US stocks climbed on Wednesday on higher oil prices as the euro dipped against the dollar on the eve of a European Central Bank meeting.

Data from the US Energy Information Agency on Wednesday showed lower oil production and higher stockpiles in the world's biggest economy.

That spurred a nearly 4% rise in oil prices, lifting the Dow Jones Industrial Average by 0.2% to its highest close of 2016.

Oil prices "have been the highest correlated factor to the stock market and that's why we're getting higher," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

The CAC in Paris rose 0.6% and the German DAX 30 0.7% as the euro retreated against the dollar ahead of Thursday's ECB meeting.

The gathering follows an ECB meeting in early March at which the central bank unveiled new stimulus measures in an effort to boost growth and inflation. Most analysts do not expect major new announcements.

But ECB chief Mario Draghi's comments will be scrutinized for "any hints on cutting the deposit rate further into negative territory in the future, something the ECB head had suggested would not happen," said Forex.com analyst Fawad Razaqzada.

"If there is a U-turn in this regard, then the euro could come under renewed pressure."

Shanghai's market was the biggest loser on Wednesday, falling 2.3%.

Analysts said there was speculation that a string of positive recent data from China, the world's number two economy, could prevent authorities there from unveiling more stimulus measures.

Volkswagen surged 6.6%, lifted by reports that it reached a deal with US authorities to compensate to US car owners that could avert a trial over its emissions-cheating scandal.

Japanese car maker Mitsubishi Motors crashed more than 15% after it admitted it falsified fuel-efficiency tests in more than 600 000 vehicles. Testing was manipulated to boost fuel economy rates above the cars' actual level.

Dow member Coca-Cola tumbled 4.8% as it reported a 4.8% decline in first-quarter earnings to $1.5bn.

Revenues fell in all of Coca-Cola's reporting regions outside North America.

Chip maker Intel advanced 1.3% after saying it would trim 12 000 jobs, about 11% of its staff, as it refashions itself away from the declining personal computers market and toward wearables and other mobile technology.