U.S. Stocks Rise on Confidence Data While Euro Weakens

U.S. stocks rose, ending the biggest two-day drop of the year in the Standard & Poor’s 500 Index, and oil advanced as data showed consumer confidence at the highest level since 2007. The euro weakened for a third day amid concern political wrangling will slow the global recovery.

The S&P 500 (SPX) advanced 0.2 percent to 1,379.85 as of 4 p.m. in New York. The Stoxx Europe 600 Index slipped 0.1 percent. Oil increased 1.2 percent to $86.07 a barrel in New York. The euro slid 0.3 percent to $1.2712. The pound weakened against most of its 16 major counterparts. Ten-year U.K. bond yields dropped four basis points to 1.73 percent.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index climbed to 84.9, the fourth straight increase, from 82.6 in October. The U.S. risks entering a recession should policy makers fail to avoid automatic tax increases and spending cuts next year, Fitch Ratings said.

“I do think that people probably have underestimated the resilience of the economy,” said Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas. His firm oversees $832 billion. “Consumer confidence is better, some of the housing numbers have been more constructive. However, we want to make sure that the recovery process doesn’t get sidetracked by any fiscal shocks.”

President Barack Obama invited the top Democratic and Republican leaders in Congress to the White House next week to begin talks on a plan to avert the so-called fiscal cliff.

“The American people voted for action,” Obama said at the White House, giving his first public remarks on the budget and deficit since winning re-election Nov. 6. He again said any solution must include spending cuts and raising revenue, including raising taxes on the wealthiest.

Apple Slumps

Boeing Co., JPMorgan Chase & Co. (JPM) and Caterpillar Inc. added at least 0.5 percent to pace gains among the largest companies. Apple Inc., the world’s most valuable company, rallied 1.7 percent after an 8 percent plunge over the previous three days. J.C. Penney Co. slid 4.8 percent after reporting a third-quarter loss that was larger than analysts had estimated.

The Stoxx 600 (SXXP) has fallen 1.7 percent this week. Credit Agricole SA (ACA) sank 5.9 percent as France’s third-largest bank posted a wider-than-estimated quarterly loss on costs tied to the sale of its Greek unit.

“Markets continue to trade on a weak note given lingering fiscal cliff concerns and worries about whether Greece will get the funding it needs to meet debt payments,” Nick Verdi, a currency strategist at Barclays Plc in Singapore, wrote in a report today.

Gilt Yields

U.K. bonds rose, with 10-year yields falling the most in five weeks, after the Bank of England said it planned to transfer coupon payments it receives from its gilt holdings to the Treasury to lower the nation’s debt. Ten-year yields touched to 1.67 percent, the lowest since Oct. 5.

The S&P GSCI Index of 24 raw materials rose 0.8 percent, led by gasoline, oil and heating oil. Gold futures rose 0.3 percent to $1,730.90 an ounce in New York. Copper declined 0.7 percent in New York for a fifth weekly decline.

The MSCI Emerging Markets Index (MXEF) slid 0.4 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slipped 0.7 percent. India’s Sensex sank 0.9 percent as Oil & Natural Gas Corp., the country’s biggest energy explorer, posted its steepest profit decline in four years.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.