Stock Rally Fades With Apple as Euro, Greek Bonds Climb

Gains in U.S. stocks faded by the end of the session as Apple Inc. (AAPL) trimmed its advance and financial shares slumped. The euro and Greek bonds advanced.

The Standard & Poor’s 500 Index lost less than 0.1 percent to 1,460.15 at 4 p.m. in New York after gaining as much as 0.5 percent. The euro appreciated 0.1 percent to $1.2983 and Greek 10-year rates fell below 20 percent for the first time since March. Oil rose, trimming the biggest weekly loss in more than three months. Ten-year Treasury yields lost one basis point to 1.75 percent, erasing earlier gains.

Apple, the largest company by market value, ended the day up 0.2 percent after rallying as much as 0.9 percent in morning trading as the company began selling its iPhone 5. S&P 500 financial shares lost 0.3 percent and were the biggest drag on the index among 10 industries. Futures and options contracts expire today, a process known as quadruple witching, and investors also prepared for S&P’s quarterly index rebalancing.

“The market is trying to catch its breath,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion, said in a telephone interview. “We’ve had a pretty good run and, in the absence of incremental news, investors are resetting their portfolios.”

Trading of S&P 500 companies was 55 percent higher than the 30-day average. The index ended the week down 0.4 percent and is up 16 percent this year, having climbed last week to the highest level since 2007.

Fund Flows

Global equity funds lured the largest weekly inflows this year, Citigroup Inc. said, after the U.S. Federal Reserve unveiled another round of quantitative easing and the European Central Bank pledged to buy bonds to contain the debt crisis.

McDonald’s Corp., AT&T Inc., General Electric Co. and Exxon Mobil Corp. lead gains in the Dow Jones Industrial Average, while Coca-Cola Co., Alcoa Inc. and Cisco Systems Inc. were among the worst performers. The Dow slipped 17.46 points to 13,579.47 and lost 0.1 percent this week.

Expedia Inc. rallied 4 percent after the stock was rated buy in new coverage at Cantor Fitzgerald LP. Darden Restaurants Inc. climbed 4.6 percent after the world’s largest casual dining chain operator reported earnings that topped estimates amid improving sales at Olive Garden.

The U.S. is the most attractive stock market because of the strength of corporate balance sheets, low interest rates and valuations, said billionaire investor Michael Price, president of MFP Investors LLC, who made his reputation as a value investor in the 1980s by buying shares of beaten-down lenders and running some of the best-performing U.S. mutual funds.

‘Place to Invest’

“With these interest rate levels and our PEs and our cash on the balance sheets and America being the place to invest in the world, where else do you want to go?” Price said in a “Bloomberg Surveillance” interview with Tom Keene and Sara Eisen. “I think it’s very early for European stocks.”

The S&P 500, the benchmark gauge of U.S. equities, trades for about 14.9 times its companies’ reported earnings, compared with an average price-to-earnings multiple of about 16.3 since 1954.

The Stoxx Europe 600 Index (SXXP) rose 0.5 percent, trimming this week’s decline to less than 0.1 percent. Vedanta Resources Plc climbed 3 percent and Swiss Life Holding AG gained 2.4 percent.

European policy makers will unveil a financial bailout program for Spain as early as next week, the Financial Times said.

Greek Yields

Greek 10-year yields slid 62 basis points to 19.93 percent.

A report of Greece’s progress by the so-called troika of inspectors from the euro area, ECB and International Monetary Fund won’t be delayed until after the U.S. election, a Greek finance ministry official said. The official, who asked not to be identified, spoke as Finance Minister Yannis Stournaras began a meeting on budget plans with the officials in Athens today.

The S&P GSCI gauge of 24 commodities rose 0.9 percent, paring the drop for this week to 4.4 percent, the first weekly decline since July. Gains today were led by natural gas, coffee and wheat. Oil for November delivery advanced 0.5 percent to $92.89 a barrel in New York. Wheat gained 2 percent after Russia’s Economy Minister Andrei Belousov said the nation may consider limiting grain exports if domestic prices keep rising.

The MSCI Emerging Markets Index (MXEF) increased 0.8 percent, paring its first weekly drop this month.

India’s Sensex rallied 2.2 percent after the government changed tax rules on overseas loans, extending policy reforms announced last week, and the third-biggest party pledged to support the government. The Hang Seng China Enterprises Index of mainland companies increased 1 percent. Turkey’s benchmark gauge jumped 1.3 percent led by Turkiye Is Bankasi AS as the country’s biggest bank by assets cut provisions for bad loans.

To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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