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Stocks in U.S., Crude Oil Advance While Treasuries, Yen Decline

U.S. stocks rose, sending the Standard & Poor’s 500 Index to a three-week high, as energy and consumer shares rallied and the equity measure rebounded from a level watched by chart analysts. Treasuries declined as the government sold $35 billion of five-year notes.

The S&P 500 climbed 0.7 percent to 1,319.44 at 4 p.m. in New York. It advanced after falling to 1,305.26, compared with yesterday’s 50-day average of 1,306.11, a bullish sign to some traders. Yields on five-year notes added five basis points to 2.23 percent. The yen fell to 116.39 per euro, the weakest level since May, amid speculation central banks in Europe and the U.S. may curtail stimulus measures. Crude oil rose 0.8 percent to $104.79 a barrel, breaking a three-day losing streak.

Home Depot Inc. (HD) rallied after selling $2 billion in debt to help fund stock buybacks, while Schlumberger Ltd. (SLB) helped lead energy stocks higher as oil rose and Baker Hughes Inc. (BHI) Chief Executive Officer Chad Deaton said Saudi Arabia will deploy more drilling rigs. Equities climbed three days before a government report forecast to show U.S. nonfarm payrolls rose 190,000.

“We found support at the 50-day moving average today,” said Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages $3 billion. “We should continue like this until we get the jobs report on Friday, which may or may not break us out of this range.”

32-Month High

The S&P 500 closed at a 32-month high of 1,343.01 on Feb. 18 before falling to 1,256.88 on March 16. It dropped below its 50-day average at least four times today, rebounding within three minutes each time, according to data compiled by Bloomberg. The advance by U.S. shares reversed losses in the MSCI All-Country World Index of stocks in 45 nations, which climbed 0.2 percent after declining 0.5 percent earlier.

Home Depot rose 2.9 percent while Schlumberger advanced 4.4 percent. AK Steel Holding Corp. (AKS) gained 5.2 percent as SAC Capital Advisors LP reported a stake. Apollo Group Inc. (APOL), owner of the biggest U.S. for-profit college, fell 4.3 percent following lower enrollment.

Yields on five-year Treasury notes climbed for a ninth day in the longest losing streak since Lehman Brothers Holdings Inc.’s bankruptcy in as the government paid the highest yield at a five-year debt auction since April 2010. At the $35 billion sale, the notes drew a yield of 2.260 percent, higher than the average forecast of 2.246 percent in a Bloomberg News survey of eight primary dealers.

Portugal, Greece

Two-year notes issued by Portugal and Greece slumped after the nations’ ratings were cut by S&P, which said the European Union’s new bailout rules may mean that both eventually renege on their debt obligations. S&P cut Portugal for the second time in a week to the lowest investment-grade rating of BBB-, three steps below Ireland. Greece’s rating fell two grades to BB-, three levels below investment grade.

Yields on Portugal’s two-year note yield surged 30 basis points to 7.73 percent, while comparable Greek debt jumped 42 basis points to 15.36 percent.

Japan’s currency weakened against all of its major counterparts as St. Louis Federal Reserve President James Bullard said signs of an improving economy may lead the central bank to curtail debt buying. New Zealand’s dollar was the top currency against the yen after posting its first trade surplus in eight months. Brazil’s real was the second-best performer even as the country imposed a tax designed to stem gains.

The yen weakened 1.1 percent to 116.35 per euro. It declined 1 percent to 82.47 per dollar. Europe’s shared currency traded at $1.4108, compared with $1.4087 yesterday.

Energy stocks in the S&P 500 advanced 1 percent, the second-biggest gain among 10 industries, as oil rallied. Crude had fallen 1.7 percent during the previous three days. Deaton, the CEO of Baker Hughes, said Saudi Arabia will increase the number of deployed drilling rigs to 118, a 28 percent boost. A spokesman for Saudi Aramco declined to comment.

To contact the reporters on this story: Nick Baker in New York at nbaker7@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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