U.S. stocks halted a two-day drop as a jump in home sales bolstered confidence in the American economy and the Bank of Japan increased its asset-purchase program. Oil slid after a bigger-than-forecast gain in supplies.
The Standard & Poor’s 500 Index added 0.1 percent to 1,461.05 at 4 p.m. in New York. Oil lost 3.5 percent to $91.98 a barrel, the lowest settlement since Aug. 3. Ten-year Treasury yields decreased three basis points to 1.78 percent while Spanish debt rose for a second day. The dollar weakened against 10 of 16 major peers, with the euro little changed at $1.3058.
U.S. equities turned higher after the National Association of Realtors reported that purchases of previously owned homes increased 7.8 percent to a 4.82 million annual rate, a two-year high. The Bank of Japan joined the Federal Reserve and the European Central Bank in taking steps to boost growth.
“The U.S. economy is looking pretty good,” George Young, a partner at St. Denis J. Villere & Co. in New Orleans, said in a phone interview. His firm oversees about $1.6 billion. “The low interest-rate environment created by the Fed is beginning to inject some strength into the minds of consumers.”
The S&P 500, which closed last week at the highest level since December 2007, slipped 0.4 percent in the previous two sessions.
Home Depot Inc. and Walt Disney Co. rose at least 1 percent to pace advances in the Dow Jones Industrial Average. (INDU) An S&P index of homebuilders soared 3.1 percent as PulteGroup Inc. rallied 4.3 percent. Corning Inc. gained 1.2 percent after Goldman Sachs Group Inc. advised investors to buy the stock. Energy shares sank the most among 10 groups in the S&P 500 today, losing 0.9 percent as a group.
Oil slid amid a jump in U.S. inventories and as Saudi Arabia planned to reduce prices by pumping about 10 million barrels a day and produce more if customers demand it, a Persian Gulf official with knowledge of the matter said yesterday.
The Energy Department said supplies rose 8.53 million barrels last week, more than eight times what was projected in a Bloomberg survey. Imports arrived at the highest rate since January and output rose.
Brent crude futures lost 3.6 percent to $108.02 a barrel. The S&P GSCI Index of raw-materials retreated 2 percent, extending this week’s slide to 5.4 percent. Energy products had the five biggest declines among the 24 commodities tracked by the index.
The Stoxx Europe 600 Index rebounded after two days of losses, climbing 0.4 percent. Heineken NV surged 6.4 percent, the most in three years, as Thai billionaire Charoen Sirivadhanabhakdi’s companies gave their support for Heineken’s offer for the beer business of Fraser & Neave Ltd.
The yield on Spain’s 10-year bonds fell 20 basis points to 5.69 percent and the nation’s two-year rates tumbled 21 basis points to 3.12 percent. Prime Minister Mariano Rajoy said the government is committed to cutting the budget deficit.
The yield on 10-year Italian debt slid 13 basis points to 4.92 percent. Germany’s two-year note yield fell one basis point to 0.07 percent as the nation auctioned the securities at a positive yield for the first time since June 20
Japan’s Nikkei 225 Stock Average jumped 1.2 percent to a five-month high and the Hang Seng China Enterprises Index of mainland companies advanced 1.7 percent.
The Bank of Japan expanded its asset-purchase fund to 55 trillion yen ($695 billion) from 45 trillion yen. It also maintained a separate fund that extends credit to banks at 25 trillion yen. The BOJ’s move, predicted by only five of the 21 economists in a Bloomberg survey, follows measures announced by the Federal Reserve and European Central Bank to spur growth and contain the debt crisis.
“The BOJ seems to have gone above and beyond,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of about 5 trillion yen. “I didn’t expect them to move this time.”
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