Oil prices bobbed above $97 per barrel and then retreated on Tuesday, a day after prices unexpectedly took a plunge. The drop in oil prices erased the gains made last week when the Federal Reserve unveiled new steps to boost the US economy.
US stocks rallied after news that the Federal Reserve will spend $40 billion a month to buy mortgage securities. Nearly four stocks rose for every one falling, and the Dow closed at its highest level since December 2007.
Oil futures rose nearer to $98 a barrel Wednesday after a German court ruling favored an ESM (European Stability Mechanism) bailout fund for deeply indebted eurozone countries. The ruling means that the ESM can come into force by the end of this year.
European Central Bank's bond-buying plan continued to lift financial markets on Friday ahead of key US jobs data. European Central Bank president Mario Draghi unveiled a plan Thursday to to buy unlimited amounts of short-term bonds from euro countries that request help.
Stock futures in the US edged higher Tuesday morning on hopes that the European Central Bank will work out a deal to help Spain and Italy borrow at cheaper rates. Stock futures on the Dow rose 0.2 percent to 13,255.
Spain bailout concerns have rattled markets in recent days. But stock markets rose after the European Central Bank hinted that it could intervene to lower the nation's borrowing costs, reducing the potential for a full-blown Spain bailout.