Stocks rallied, sending the Standard & Poor’s 500 Index (SPX) to a record, and the euro rebounded from a four-month low as the reopening of Cyprus banks eased concern about Europe’s debt crisis. Commodities erased early gains. Treasuries were little changed and the dollar fell.
The S&P 500 jumped 0.4 percent to 1,569.19 at 4 p.m. in New York, eclipsing its previous closing high of 1,565.15 set in October 2007. The Stoxx Europe 600 Index climbed 0.5 percent, while the euro appreciated 0.3 percent to $1.2819. German bunds erased an advance after the 10-year yield fell to the lowest in almost eight months. The yen was higher against most of its major peers, while the Dollar Index lost 0.3 percent.
The S&P 500’s advance above its record close marks the completion of the recovery from a bear market that wiped out more than $10 trillion of value from the world’s largest stock market. Gains today came as Cyprus’s banks reopened with new rules curbing access to cash after being closed since March 16. German retail sales, adjusted for inflation and seasonal swings, increased 0.4 percent last month from January, while U.S. government data showed the economic growth slowed less than previously estimated last quarter.
“It is encouraging that we finally hit that record but I expect in time we will move to higher levels,” Peter Jankovskis, the chief investment officer at Lisle, Illinois- based Oakbrook Investments LLC, said in a phone interview. His firm oversees $3.3 billion. “As the headlines hit the tape, it causes people to experience some regret and decided they have to step in,” he said. “That hopefully will propel the market even higher.”
Financial markets in the U.S. and most of the world will be closed tomorrow for the Good Friday holiday.
The S&P 500 remains below its all-time intraday high of 1,576.09 set in October 2007. The Dow Jones Industrial Average advanced to another record today, after first surpassing its 2007 high on March 5. The S&P 500 capped a 10 percent gain in the first quarter, its biggest in a year. The Dow is up 11 percent since the end of last year.
Shares of American companies are rallying as their profits expand for a third straight year and the Federal Reserve commits to continuing its unprecedented monetary stimulus. Reports this week showing a 5.7 percent jump in durable goods orders and the biggest increase since 2006 for the S&P/Case-Shiller index of home prices in 20 cities were among the latest data points to fuel optimism in the economy.
Shares of retailers, restaurant chains and other companies that depend on discretionary consumer spending jumped more than 234 percent as a group since the bottom of the bear market to lead gains among the 10 main groups in the S&P 500. Gauges of financial and industrial companies have almost tripled, while technology, commodity and health-care stocks are up more than 100 percent.
Wyndham Worldwide Corp., CBS Corp., Fifth Third Bancorp and Gannett Co. are among six companies in the index that have surged more than 1,000 percent since March 9, 2009.
The four-year bull market has sent the S&P 500 up about 132 percent since it reached a 12-year low of 676.53. The rally is extending beyond the average length of bull markets, according to Birinyi Associates Inc. data that show cycles since 1962 have an average duration of four years. Of nine advances, four have lasted longer than the mean and the market rose for about six years during those periods.
“Inasmuch as investors are constantly examining value and opportunity in the markets, I would say the psychological component of a new high is probably more important to the media than to professional investors,” Mike Shea, a managing partner at New York-based brokerage firm Direct Access Partners LLC, said in an interview. “That having been said, clearly there is less low-hanging fruit than there was in 2009, 2010.”
Among stocks moving today, McDonald’s Corp. and International Business Machines Corp. added at least 0.8 percent to pace advances among the biggest companies. GameStop Corp. rallied 5.8 percent after quarterly profit topped estimates. Deckers Outdoor Corp. increased 6 percent after Jefferies Group Inc. raised its price target.
A gauge of food and beverage companies posted the biggest gain out of 19 industries in the Stoxx 600 (SXXP) as DE Master Blenders 1753 NV surged 25 percent, the biggest rally since its initial public offering last June. The coffee and tea company spun off by Sara Lee Corp. said that Joh. A. Benckiser may acquire the company. JAB, an investment firm run by Bart Becht, wants to pay 12.75 euros a share, according to a statement by Master Blenders.
The euro rebounded from its lowest level in more than four months against the dollar, and erased a drop against the yen. Japan’s currency appreciated against 14 of 16 major peers after central bank Governor Haruhiko Kuroda failed to give details of any new deflation-fighting plans when he spoke to upper house lawmakers today.
German 10-year bond yields rose 2 basis points to 1.29 percent after dropping to 1.25 percent, the least since Aug. 3. Yields on the securities capped an eighth-straight quarterly decline. Ten-year U.S. Treasury yields were little changed at 1.86 percent.
The cost of insuring against losses on Italian sovereign debt climbed to the highest since November. Credit-default swaps on Italy jumped to as high as 311 basis point.
Italian President Giorgio Napolitano took charge of the search for the next prime minister after Pier Luigi Bersani failed to assemble a majority in the divided parliament. Napolitano will “personally check the possible developments in the political-institutional framework,” Donato Marra, general secretary for the head of state, said today at the presidential palace in Rome after Bersani met the Italian president.
The S&P GSCI gauge of 24 commodities slipped 0.5 percent today. The gauge is up 1.2 percent this year, led by a 20 percent surge in natural gas. West Texas Intermediate oil climbed for a fifth day, capping the longest rally this year. Prices rose 0.7 percent to a six-week high of $97.23 a barrel.
The MSCI Emerging Markets Index (MXEF) was little changed after a three-day rally. The gauge has declined 2.2 percent in the first three months of the year, heading for the worst first-quarter slump since 2008.
The Shanghai Composite Index (SHCOMP) sank 2.8 percent after the banking regulator tightened rules on wealth-management products and the cabinet called for new measures to deregulate interest rates. Benchmark gauges in Hong Kong, Taiwan and Thailand lost at least 0.3 percent.
Turkey’s ISE National 100 Index (XU100) rose 1.3 percent and benchmark two-year yields fell after S&P upgraded the country’s debt rating to BB+, one level below investment grade. Fitch Ratings raised Turkey to BBB- in November, the lowest investment-grade level and the nation’s first such rating in 18 years.
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