Most U.S. stocks fell as data on consumer confidence and spending failed to boost equities a day after European leaders expanded the region’s bailout plan. The euro slumped as Italian borrowing costs increased, and copper futures completed the biggest weekly rally since at least 1988.
About four stocks declined for every three that rose on U.S. exchanges as the Standard & Poor’s 500 Index climbed less than 0.1 percent. It jumped 3.4 percent yesterday and lost as much as 0.6 percent today. The Russell 2000 Index of small U.S. companies retreated 0.6 percent. The Stoxx Europe 600 Index dropped 0.2 percent. The euro slumped 0.3 percent, and yields on Italian 10-year bonds rose 15 basis points to 6.02 percent. Copper rose 0.4 percent, extending a weekly gain to 15 percent.
Equities pared losses in the final minutes and the S&P 500 erased a drop as it completed a fourth straight weekly advance, the longest since January. The index is poised for the largest advance for a month since 1974. Reports showed consumer confidence topped economists’ projections and growth in Americans’ spending tripled in October versus September. Italy sold bonds a day after Europe proposed a bigger rescue program.
“The devil is in the details,” Don Wordell, a fund manager for Atlanta-based RidgeWorth Capital Management, which oversees about $47 billion, said in a phone interview about the European rescue. “There are lots of questions on how the plan is going to work and how they are going to fix their debt issues. We had big rally yesterday,” he said. “You’ve got to give it a little breather.”
1 Trillion Euros
Stocks advanced worldwide yesterday and the euro climbed to the highest level since Sept. 6 against the U.S. dollar after the European regional rescue fund was boosted to 1 trillion euros ($1.4 trillion) and investors agreed to a voluntary writedown of 50 percent on Greek debt.
European equities dropped today after Italy’s borrowing costs rose to a euro-era record at a sale of three-year bonds, driving yields higher amid concern that efforts to contain the sovereign crisis won’t be enough to safeguard the region’s third-largest economy.
Hewlett-Packard Co. (HPQ) helped boost the 30-company Dow Jones Industrial Average, which rose 22.56 points, or 0.2 percent, to 12,231.11. Hewlett-Packard Chief Executive Officer Meg Whitman abandoned a proposal to spin off the company’s market-leading personal-computer unit, driving the stock up 3.5 percent to a two-month high of $27.94.
Canadian Pacific Railway Ltd. (CP) rose 4.3 percent to $64.57 as of 4 p.m. New York time and then surged as much as 6.7 percent to $68.91 in after-hours trading. Following the close of U.S. exchanges, Pershing Square Capital Management LP, the activist hedge fund run by Bill Ackman, disclosed that it bought the equivalent of a 12.2 percent stake in the railroad.
The hedge fund said it bought 1.67 million shares for $63.52 each today. The stock didn’t trade at that level until 3:53 p.m., according to data compiled by Bloomberg. More than 1.46 million Canadian Pacific shares traded in the U.S. between 3:50 p.m. and 4 p.m., the data show.
Whirlpool Corp. (WHR), the world’s largest maker of household appliances, slumped 14 percent after cutting more than 5,000 jobs and lowering its annual profit forecast. Cablevision Systems Corp. (CVC) tumbled 13 percent after the U.S. cable-TV provider said profit declined 65 percent.
U.S. consumer confidence improved in October. The Thomson Reuters/University of Michigan index of sentiment climbed to 60.9 from 59.4 in September. The gauge was projected to drop to 58, according to the median forecast of 66 economists surveyed by Bloomberg News. A Commerce Department report showed consumer purchases increased 0.6 percent in October after a 0.2 percent gain the prior month.
“There’s a long way to go on the economy, but sentiment has definitely improved,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “As for Europe, there will be hiccups. Still, I believe we seen the lows for the year on the S&P 500.”
The euro declined from almost a seven-week high against the dollar and yen as a rise in Italian borrowing costs raised concern European Union leaders haven’t done enough to stem the region’s debt crisis.
Europe’s currency weakened after posting its biggest gain in more than a year against the greenback yesterday, when leaders announced a way to prevent a Greek default and safeguard banks. Brazil’s real performed best among major counterparts as the central bank sold dollars. The yen climbed toward a post- World War II record against the dollar, spurring bets Japan will intervene to weaken its currency.
Copper rose as declining production in Chile and a labor dispute in Indonesia raised supply concerns. Futures climbed to $3.706 a pound, extending a monthly rally to 18 percent.
Output in Chile, the world’s top copper-mining nation, fell 1.9 percent to 436,734 metric tons in September from a year earlier, the National Statistics Institute in Santiago said today. About 8,000 workers at Indonesia’s Grasberg mine owned by Freeport-McMoRan Copper & Gold Inc. have been on strike since Sept. 15.
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