Copper rebounded after sliding into a bear market, gold rose and European stocks climbed for a fourth day on speculation central banks will ease monetary policy. U.S. shares ended little changed.
Copper futures climbed 2 percent in New York and gold increased more than 1 percent. The Stoxx Europe 600 Index (SXXP) added 0.7 percent and has rallied 3.8 percent in four days, its best gain since July. The Standard & Poor’s 500 Index swung between gains and losses throughout the day before closing little changed at 1,578.79. New Zealand’s dollar strengthened after the central bank said growth had picked up. Italian and German borrowing costs fell to record lows at auctions today. Ten-year U.S. Treasury yields lost one basis point to less than 1.70 percent, holding near their low of 2013.
Commerzbank AG, UBS AG, Rabobank International and Royal Bank of Scotland Group Plc said the European Central Bank will probably cut its key rate by 25 basis points in May. German business confidence fell for a second month in April, the Ifo Institute said today, after data yesterday showed services and factory output in the euro area shrank for a 15th month. Australia’s central bank has more room to cut interest rates, Treasurer Wayne Swan said.
“European growth numbers have fallen since the start of the year so it would help if the ECB cut rates,” said Andrea Williams, the head of European equities at Royal London Asset Management Ltd., which manages about $76 billion. Company “top lines are not great but offset by cost cutting,” she said.
Orders for U.S. durable goods fell in March by the most in seven months. Bookings for products meant to last at least three years decreased 5.7 percent after a revised 4.3 percent gain the prior month that was smaller than previously estimated, the Commerce Department said today. The median forecast of 78 economists surveyed by Bloomberg called for a 3 percent decline.
The S&P GSCI gauge of 24 commodities advanced 1.3 percent for its biggest gain of the year. Copper rallied 2 percent to $3.165 a pound in New York and advanced 2.3 percent to $7,030 a metric ton in London, the first gain in four days after falling into a bear market on April 19. Gold futures for June delivery climbed 1.1 percent to $1,423.70 an ounce as investor demand for coins surged amid a slump in exchange-traded products backed by the metal.
Two shares advanced for each that declined in the Stoxx 600. The gauge has climbed 3.8 percent in four days, the biggest rally for that length of period since July.
PSA Peugeot Citroen (UG), Europe’s second-biggest carmaker, surged 10 percent as sales beat analyst estimates. Storebrand ASA rallied 6.5 percent after Norway’s second-largest insurer reported earnings that topped projections. Heineken NV slumped 5.1 percent, the most since August 2011, after the brewer cut its forecasts.
The S&P 500 fluctuated after gaining for three straight days, surging 2.4 percent for its biggest advance since January. Apple Inc. (AAPL) closed down 0.2 percent after reporting its first profit drop in a decade as Chief Executive Officer Tim Cook dashed expectations that a new iPhone might arrive as early as June, overshadowing the company’s plan to return more cash to shareholders.
Boeing Co. rallied 3 percent and Yum! Brands Inc. advanced 7 percent after reporting first-quarter earnings that topped estimates. Procter & Gamble Co. fell 5.9 percent, the most in four years, after its full-year earnings forecast missed analyst projections.
Earnings beat estimates at 73 percent of the 174 companies in the S&P 500 that posted results so far this season, while 56 percent trailed revenue projections, according to data compiled by Bloomberg.
“The market is churning here,” James McDonald, chief investment strategist at Northern Trust Corp. in Chicago, said by phone. His firm manages about $810 billion. “Earnings have been better than expected, but that’s almost always the case. What investors have been modestly concerned by is the revenue growth outlook,” he said. The durable goods report “indicates there was a slowdown in the economy at the end of the quarter.”
The MSCI Emerging Markets Index (MXEF) rose 1 percent to a one- week high. Russia’s Micex index jumped 2.8 percent, the most since September, as commodities rebounded. The Shanghai Composite Index advanced 1.6 percent. Benchmark gauges in Brazil, Turkey, the Czech Republic and Taiwan gained at least 0.6 percent.
New Zealand’s dollar, known as the kiwi, strengthened to NZ$1.2111 against its Australian counterpart, a three-year high, as Australian consumer prices rose less than economists estimated. New Zealand’s 10-year government bond yield fell to a record-low 3.17 percent.
Germany sold 30-year bonds at an average yield of 2.16 percent, the lowest on record, data from the Bundesbank showed. The yield at Italy’s auction of zero-coupon bonds dropped to an unprecedented 1.167 percent, from 1.746 percent at a sale on March 25.
The average yield to maturity of securities in Bank of America Merrill Lynch’s Global Broad Market Sovereign Plus Index fell to an all-time low of 1.3419 percent yesterday.
The Markit iTraxx Europe index of 125 investment-grade companies fell one basis point to 106 basis points today, the lowest since March 15, according to data compiled by Bloomberg.
The cost of insuring Japanese corporate bonds dropped to a level that matched its lowest in three years, according to data provider CMA. The Markit iTraxx Japan Index, which is comprised of contracts on 50 companies, declined 2.4 basis points to 90.5 basis point.
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