U.S. Stocks Gain on Jobs Data While Treasuries, Euro Fall

U.S. stocks rose for a third day as faster-than-forecast growth in jobs overshadowed concern about budget negotiations and a slide in Apple Inc. (AAPL) Treasuries dropped, while the euro fell on concern about German growth.

The Standard & Poor’s 500 Index (SPX) climbed 0.3 percent to close at 1,418.07 at 4 p.m. in New York, its highest level since the Nov. 6 elections. The yield on 10-year Treasuries increased four basis points to 1.63 percent. The euro slid 0.3 percent to $1.2926 after the Bundesbank lowered its 2013 projection for German economic growth to 0.4 percent from the 1.6 percent predicted in June. Oil lost 0.5 percent to $85.93 a barrel in a fourth straight decline.

Equities opened higher after the Labor Department said U.S. employment increased by 146,000 in November and the jobless rate fell to an almost four-year low, easing concern that superstorm Sandy reduced hiring. Stocks pared gains as a gauge of consumer confidence trailed forecasts and House Speaker John Boehner said no progress had been made in talks to avert the “fiscal cliff” of automatic tax increases and spending cuts set to take effect next year.

“There is a lot of confusion and there are a lot cross currents here to consider,” Terry L. Morris, who helps oversee about $2.5 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “Unemployment has improved, yet confidence has deteriorated. How do you explain the market isn’t doing anything when Boehner comes out and says we’re nowhere? It seems like the market should have been going down, but the fact it’s not tells me that the market wants to go higher.”

Technical Level

Today’s gain pushed the S&P 500 above its average from the past 50 days for the first time since Oct. 19, according to data compiled by Bloomberg. The index had spent the previous 32 days below the threshold, the longest streak since the 52-day stretch that ended Oct. 7, 2011, the data show. The average is watched by traders to gauge the market’s trends.

Apple, the largest company by market value, sank 2.6 percent and was the biggest drag on the S&P 500. Financial, commodity and consumer-staples companies led gains among the 10 main industries while technology shares were the only group to fall. JPMorgan Chase & Co., Caterpillar Inc. and Bank of America Corp. rose at least 1.2 percent to lead the Dow Jones Industrial Average (INDU) up about 81 points.

Economic Data

The median estimate of 91 economists surveyed by Bloomberg called for a gain of 85,000 jobs. Sandy “did not substantively impact” the data, the agency said. The unemployment rate fell to 7.7 percent, the lowest since December 2008, as size of the labor force shrank.

The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment for December fell to 74.5 from 82.7 a month earlier. Economists projected 82 for the gauge, according to the median estimate in a Bloomberg survey. Projections of the 67 economists surveyed ranged from 80 to 88.

The Stoxx Europe 600 Index climbed 0.1 percent and ended the week with a 1.2 percent gain. Berkeley Group Holdings Plc jumped 4.7 percent to a five-year high as the U.K.’s second- largest homebuilder by market value said first-half profit rose 45 percent. Deutsche Telekom AG, Germany’s biggest phone company, fell 1.9 percent after forecasting a lower dividend for the first time in three years.

The euro slipped against all but three of its 16 major counterparts. A majority of ECB policy makers were open to cutting the benchmark rate yesterday and there is a possibility of a reduction early next year if the economy doesn’t pick up, three officials with knowledge of the Governing Council’s discussions said.

“The euro will continue to be sold,” said Kikuko Takeda, senior currency economist in London at Bank of Tokyo-Mitsubishi UFJ Ltd. “Europe is in recession and with no prospects of it getting better any time soon.”

Commodities Retreat

Agricultural commodities led losses in the S&P GSCI Index, which lost 0.4 percent. Soybean futures fell for the first time this week and corn extended its decline on speculation that planting delays will end in Argentina while rain improves crop conditions in Brazil. Wheat also slid.

Gold futures for February delivery rose 0.2 percent to settle at $1,705.50 an ounce. Gold traders are the least bullish in seven weeks as Goldman Sachs Group Inc. said the metal’s longest winning streak in at least nine decades will peak next year amid accelerating U.S. growth.

Fourteen of 31 analysts surveyed by Bloomberg expect prices to rise next week and 10 were bearish. A further seven were neutral, making the proportion of bulls the lowest since Oct. 19. Goldman lowered its 12-month estimate by 7 percent to $1,800 an ounce on Dec. 5 and said the metal would average $1,750 in 2014. Morgan Stanley said yesterday bullion will be among next year’s best-performing commodities.

The MSCI Emerging Markets Index (MXEF) added 0.3 percent to the highest level since May 2. The Shanghai Composite Index (SHCOMP) jumped 1.6 percent before data on Dec. 9 that may show China’s industrial production, retail sales and fixed asset investment gained in November, according to economists’ estimates. Brazil’s Bovespa index rallied 1.4 percent.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lu Wang in New York at lwang8@bloomberg.net

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

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