U.S. Stocks Gain With Commodities as Dollar Index Falls

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A trader monitors financial data on his computer screens beneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt. Close

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Photographer: Ralph Orlowski/Bloomberg

A trader monitors financial data on his computer screens beneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt.

Stocks rose, sending the Standard & Poor’s 500 Index to a record for a fifth day, amid better-than-projected earnings forecasts. European shares and metals gained as China’s trade and German industrial output beat estimates.

The Standard & Poor’s 500 Index added 0.4 percent to 1,632.69 as of 4 p.m. in New York while the Stoxx Europe 600 Index climbed 0.6 percent to an almost five-year high and emerging market equities erased their loss for the year. Copper, lead, natural gas and gold rose at least 1.4 percent to lead commodities higher while the Dollar Index lost 0.4 percent. Ten-year Treasury yields fell one basis point to 1.77 percent after surging 15 basis points in three days. The New Zealand dollar weakened against all 16 major peers after the Reserve Bank said it sold the so-called kiwi to protect the economy.

Whole Foods Market Inc. and Electronic Arts Inc. surged more than 10 percent to lead gains in the S&P 500 after earnings projections exceeded analyst estimates. China’s export and import growth unexpectedly accelerated in April and German industrial production increased for a second month in March, reports showed today.

“We’re transitioning out of earnings season and into a phase that’ll be more focused on macroeconomics,” David Molnar, a San Diego-based managing director at HighTower Advisors, said in a phone interview. His firm manages about $25 billion. “The market is being driven by a wall of liquidity from central banks as well as the underlying expectation that the economy will accelerate in the second half of the year.”

Market Leaders

Technology, commodity and telephone shares rose more than 0.7 percent to lead gains in nine of the 10 main industry groups in the S&P 500. UnitedHealth Group Inc., Alcoa Inc. and Hewlett-Packard Co. climbed more than 2.6 percent for the biggest gains in the Dow Jones Industrial Average, which advanced 48.92 points to 15,105.12. Symantec Corp. lost 2.4 percent after it said quarterly sales and revenue will miss analyst estimates.

News Corp. (NWS) and Monster Beverage Corp. were among five S&P 500 companies reporting earnings today. About 72 percent of companies that have released results since the start of the earnings season have exceeded profit projections, while 52 percent have missed sales estimates, data compiled by Bloomberg show.

News Corp. climbed 2.4 percent in extended trading following the close of exchanges after reporting profit that beat estimates amid higher licensing fees for television shows such as “American Idol.” Monster Beverage lost 5.9 percent after sales trailed analyst projections.

The S&P 500 has risen 14 percent this year and is up 141 percent from its bear-market low in 2009 as earnings growth and stimulus measures from the Federal Reserve fueled the rally.

‘Historically High’

Investors are set to “enjoy historically high excess returns” in the S&P 500 until 2018, according to Federal Reserve Bank of New York economists Fernando Duarte and Carlo Rosa. The main reason for the high premium is low Treasury yields at all time horizons, the economists said.

Stanley Druckenmiller, the billionaire who shut down his hedge fund in 2010 after averaging annual returns of 30 percent since 1986, said financial markets will continue their rally for now. He also said in a presentation at the Sohn Investment Conference in New York that investors should bet against the Australian dollar. The Aussie dollar slipped for a third day, weakening 0.2 percent to $1.0172.

U.S. stocks could end the year up 25 percent to 30 percent, according to Michael Novogratz, head of liquid markets at Fortress Investment Group LLC.

“There is nothing on the horizon that gets me scared,” he said in an interview today with Erik Schatzker on Bloomberg Television.“Things are healing in the U.S.”

Yen Prediction

Novogratz said he expects the Japanese yen to continue to weaken against the dollar, adding that it could reach 120 per dollar by the end of the year. The yen, which was trading at 98.88 today in New York, has weakened more than 20 percent against the U.S. currency in the past six months amid expectations of expanded monetary easing by the Bank of Japan.

About three shares advanced for every one that fell in the Stoxx 600. ING Groep NV (INGA), the biggest Dutch financial-services company, added 3.1 percent and Deutsche Telekom AG, Germany’s largest phone company, climbed 4.7 percent. Standard Chartered Plc slid 4.4 percent after the bank said operating profit in the first quarter declined “slightly.”

Bonds rose throughout Europe, with Italian 10-year yields down three basis points at 3.84 percent and Portugal’s rate decreasing nine basis points to 5.43 percent.

The MSCI Emerging Markets Index gained for a fourth day, adding 0.8 percent to erase its 2013 loss. Benchmark gauges in Taiwan, Turkey and South Africa climbed more than 1 percent.

Turkey Rally

Turkish banks lifted the nation’s benchmark stock index to a record as investors speculated S&P will raise the nation to investment grade and as Kurdish militants started withdrawing from the country today.

Turkey’s banking index advanced 2.6 percent to the highest level since at least May 2001, driving the Borsa Istanbul gauge of 100 largest stocks up 1.6 percent to 90,852.21 at the close in Istanbul. Financial stocks have a 57 percent weighting in the benchmark measure, according to data compiled by Bloomberg.

The Hang Seng China Enterprises Index of mainland companies rose 1.5 percent and the Shanghai Composite Index (SHCOMP) added 0.5 percent

China Data

Chinese exports surged 14.7 percent in April and imports advanced 16.8 percent last month, while the trade surplus was a higher-than-projected $18.2 billion, data from the General Administration of Customs showed.

Export growth accelerated even as shipments to the U.S. and Europe fell, spurring Bank of America Corp. and Mizuho Securities Co. analysts to say the figures were inflated by fake reports.

“The Chinese trade data are the first sign in a while that the economy is doing better, and they are importing and exporting more commodities,” Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge Group SA in London, said by e-mail today. “The Chinese economic figures have not been satisfactory for most of this year, so any change will have a positive reaction in commodities including metals prices.”

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net

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

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