Natural gas and oil led a gauge of commodities to a five-month high as a winter storm in the U.S. Northeast boosted fuel demand and coffee surged amid a drought in Brazil. The Standard & Poor’s 500 Index rose a third day.
Gas futures jumped 6.5 percent and crude oil climbed 2.1 percent to a four-month high, driving a fifth day of gains in the S&P GSCI raw materials index. Arabica coffee surged as much as 10 percent and silver was poised for its longest rally in at least 45 years. The S&P 500 (SPX) closed 0.1 percent higher while the Dow Jones Industrial Average fell 0.2 percent. Forest Laboratories Inc. soared as Actavis Plc agreed to buy the company. The yen lost 0.5 percent and 10-year Treasuries rose.
Heating demand has cut U.S. gas stockpiles to the least in 10 years, according to C.H. Guernsey & Co., while in Brazil, a heat wave and dry weather has drained reservoirs and scorched coffee plants. Global equities are recovering following the emerging-market driven rout, with their market value rising to $62.1 trillion yesterday, above the level reached at the end of December, data compiled by Bloomberg show. The Bank of Japan maintained stimulus today, pledging to continue monetary easing.
“These are weather markets, which can be pretty dynamic in both directions,” said Ashmead Pringle, the president of Atlanta-based GreenHaven Commodity Services, which oversees about $320 million. “We’re seeing more interest and inflows into the agricultural space.”
All but one -- cocoa -- of the 24 commodities tracked by the S&P GSCI gauge advanced today, sending the index up 1.5 percent to the highest level since September. Natural gas for March delivery rose 33.7 cents to $5.551 per million British thermal units in New York, the highest settlement since Jan. 29. West Texas Intermediate crude jumped to $102.43 a barrel, the highest settlement since Oct. 10.
Arabica coffee jumped as much as 10 percent to $1.5665 a pound in New York, the biggest gain since November 2004 and highest price for a most-active contract since January 2013.
Prices for arabica coffee have surged 40 percent in 2014 as production losses in Brazil’s top growing state may be as much as 30 percent, the biggest farmers group estimates.
Soybeans reached the highest price of the year and sugar rallied as the drought threatened production in Brazil, the world’s biggest exporter of the crops. Forecasters including AgRural, Agroconsult and Celeres have cut their outlook for the soybean harvest. Hedge funds are betting on more price gains for both crops.
Silver reversed earlier losses to increase 1.1 percent for a 14th straight daily gain, the longest rising streak since at least 1968 amid demand for the metal as an alternative investment. Gold fell 0.5 percent.
In the U.S. stock market, health-care, energy and utility shares led gains among the 10 main industry groups in the S&P 500, while phone companies and producers of consumer staples fell the most.
“In 2014, you’re not going to get that rising tide that lifts all boats,” Andrew Goldberg, who helps oversee $1.6 trillion as global market strategist at JPMorgan Asset Management, said in a Bloomberg Television interview in London today. “It’s going to be a much more discerning market. If the equity part of portfolio has swollen into something too big, you’ve got to pull back.”
Coca-Cola Co., the world’s largest beverage company, slid 3.8 percent after announcing a $1 billion cost-cutting program as falling soft-drink demand in North America and slowing growth overseas contributed to an 8.4 percent drop in quarterly profit.
Ten of 11 stocks in an S&P index of homebuilders declined, led by losses of more than 1 percent in M/I Homes Inc., Meritage Homes Corp. and D.R. Horton Inc.
The Fed Bank of New York’s general economic index fell to 4.48 in February, compared with a median estimate of 8.50 in a Bloomberg survey, data today showed.
The National Association of Home Builders/Wells Fargo sentiment gauge slumped to 46 this month from 56 in January. Readings less than 50 mean more respondents reported poor market conditions than good. The measure was weaker than the most pessimistic projection in a Bloomberg survey of economists.
Forest Labs jumped 27 percent to a record-high $91.04. The Actavis deal is a win for billionaire investor Carl Icahn, who gained a board seat at Forest in 2012 and is the second-largest shareholder.
S&P 500 companies are exceeding analyst sales forecasts by the most since 2012, a sign rising consumer demand is fueling economic growth as the bull market approaches its sixth year.
Led by banks, utilities and drugmakers, sales beat analyst predictions by 1.2 percent this earnings season, the highest margin in almost two years, according to data compiled by Bloomberg. The performance came as economists raised their estimate for growth in gross domestic product to 2.9 percent in 2014, up from 2.6 percent at the start of the year, even after snowstorms helped lead to lower-than-projected data on retail sales and payrolls.
Ten-year Treasury yields fell four basis points, or 0.04 percentage point, to 2.71 percent.
The Stoxx Europe 600 Index closed little changed after increasing 5.4 percent from its Feb. 4 low through yesterday. Trading volumes were 8.4 percent lower than the 30-day average at this time of day, data compiled by Bloomberg show.
Germany’s ZEW’s index of investor and analyst expectations slid to 55.7 from 61.7 in January, after reaching a seven-year high of 62 in December. Economists forecast a decline to 61.5, according to the median of 37 estimates in a Bloomberg survey.
Inditex SA (ITX), owner of the Zara clothing chain, lost 4 percent after Citigroup Inc. reduced its stock rating. Lafarge SA fell 3.3 percent after Goldman Sachs Group Inc. advised to sell the French cement maker.
BHP Billiton Ltd. (BHP) climbed 1.9 percent in London after the world’s biggest mining company posted first-half profit that beat analysts’ estimates. John Wood Group Plc advanced 6.7 percent after the U.K. oil-services provider reported 2013 earnings.
The MSCI Emerging Markets Index slipped 0.6 percent, declining from a three-week high. The Hang Seng Index (HSI) rose 0.2 percent in Hong Kong, while a gauge of Chinese companies listed in the city retreated 0.4 percent. The Shanghai Composite Index slid 0.8 percent.
Shares in Shanghai retreated from a two-month high after China’s central bank drained money from the financial system. Gold
The People’s Bank of China conducted 48 billion yuan ($7.9 billion) of 14-day repurchase contracts at a yield of 3.8 percent, according to a statement on the bank’s website. The monetary authority last issued such contracts on June 6, when it sold 10 billion yuan of 28-day repos.
“If the Chinese policy makers are indeed serious about tightening, it is a significant negative for markets,” Mikio Kumada, a Hong Kong-based global strategist at LGT Capital Partners, said in a telephone interview. “China is now a very big economy and when you come from a credit boom to a situation where you tighten, you’re going to have lots of dislocations before things get better.”
China’s seven-day repurchase rate, a gauge of funding availability in the banking system, touched 3.71 percent, the lowest since Nov. 13, according to a weighted average by the National Interbank Funding Center. The overnight rate dropped as much as 22 basis points to 2.66 percent, the lowest since May.
The yen weakened against 12 of 16 major counterparts, losing 0.8 percent versus the euro and retreating to 102.39 per dollar. The BOJ boosted lending programs and stuck with a plan for unprecedented asset purchases, putting it at odds with the Federal Reserve as policy makers strive to support an economic recovery and reverse deflation.
Hungary’s forint slid 0.7 percent versus the euro after the central bank lowered interest rates more than economists predicted. Russia’s ruble retreated to a record low versus the dollar-euro basket used by the country’s central bank to manage the currency amid signs of faltering economic growth.
Chile’s peso weakened 0.2 percent in the first decline in six days before the central bank cut rates for the third time in five months.
The Thai baht weakened 0.6 percent versus the dollar, leading emerging-market currencies lower. The nation’s SET Index declined 0.5 percent, retreating from the highest close this year. Police moved to clear anti-government demonstrators from a protest camp in Bangkok, triggering clashes that killed two people and wounded at least 58, security and emergency officials said today.
Sweden’s krona retreated against 12 of 16 major peers, losing 0.9 percent per euro and 0.5 percent versus the dollar. Consumer prices slid an annual 0.2 percent in January, Statistics Sweden said today. They were seen rising 0.1 percent, according to a Bloomberg survey of economists.
ING Groep NV (INGA), the biggest Dutch financial services company, is selling subordinated Tier 2 bonds as average yields on the securities fall to the lowest on record. The 12-year notes, issued through ING Bank NV, can be bought back after seven years, according to a person familiar with the matter.
The average yield on bonds in Bank of America Merrill Lynch’s Euro Financial Subordinated & Lower Tier-2 Index have declined 36 basis points this year to 2.93 percent.
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