U.S. stocks erased losses, after the Standard & Poor’s 500 Index had its biggest decline in a week yesterday, as investors watched developments in Ukraine and weighed prospects for global economic growth.
Newmont Mining Corp. and Barrick Gold Corp. climbed more than 2.6 percent as gold jumped. EPL Oil & Gas Inc. surged 29 percent after Energy XXI (Bermuda) Ltd. agreed to buy it for $1.5 billion. Herbalife Ltd. lost 7.4 percent as it disclosed the Federal Trade Commission has started a civil probe into its practices. PulteGroup Inc. and Toll Brothers Inc. slipped after Credit Suisse Group AG downgraded the shares.
The S&P 500 rose less than 0.1 percent to 1,868.20 at 4 p.m. in New York, after declining as much as 0.7 percent earlier in the session. The Dow Jones Industrial Average (INDU) dropped 11.17 points, or 0.1 percent, to 16,340.08. About 6.4 billion shares changed hands on U.S. exchanges, 3 percent less than the three-month average.
“We saw a pretty healthy sell-off based on China slowdown fears and potential Russian expansion,” Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, said by phone. “The concerns of what’s going on are still on the minds of investors and they’re putting money into safe haven assets like U.S. Treasuries and gold. On the other hand, we’re seeing stocks aren’t completely out of the picture.”
The S&P 500 declined 0.5 percent yesterday as commodity shares slumped with copper and oil prices amid concern over China’s economy. China announced an economic growth target of 7.5 percent last week, the weakest since 1990, and had its first onshore bond default after a solar-panel maker failed to make an interest payment.
The nation, the biggest consumer of everything from copper to soybeans, is scheduled to release industrial output data tomorrow after reports over the weekend showed the steepest drop in exports since 2009.
In a meeting with the Ukrainian Prime Minister Arseniy Yatsenyuk today, Barack Obama called Russia’s incursion into Crimea a violation of international law and said the U.S. stands with Ukraine to protect its sovereignty and territory.
Ukraine warned Russia is amassing troops near its border as Prime Minister Arseniy Yatsenyuk visited Washington to step up the search for financial aid. Yatsenyuk met President Barack Obama today, and addresses the United Nations Security Council in New York tomorrow. Obama called Russia’s incursion into Crimea a violation of international law and said the U.S. stands with Ukraine to protect its sovereignty and territory.
Russia’s takeover of Crimea, home to its Black Sea Fleet, has sparked the worst crisis with the West since the Cold War as the European Union and the U.S. try to use sanctions to force President Vladimir Putin to retreat.
“Investors are keeping an eye on what’s happening with Ukraine and Russia,” said Christian Zogg, who manages about $540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “After the good fourth-quarter earnings season, the positive sentiment is slowly but surely priced in.”
About 70 percent of S&P 500 companies that reported earnings for the latest quarter beat analysts’ profit estimates, data compiled by Bloomberg show.
The S&P 500 has gained 1.1 percent this year, reaching a record close on March 7, after Federal Reserve Chair Janet Yellen said the U.S. economy was strong enough to withstand measured reductions to the central bank’s monthly bond purchases. Three rounds of Fed stimulus have helped push the S&P 500 up 176 percent from a 12-year low, as U.S. equities begin the sixth year of a bull market that started March 9, 2009.
The Federal Open Market Committee, which meets March 18-19, has cut monthly bond buying to $65 billion from $85 billion in December. Policy makers have indicated they plan to taper by $10 billion at each meeting absent a weakening in the economy.
The Fed is trying to determine how much of recent economic cooling has been due to weather. The government’s monthly jobs report last week showed U.S. employers added more workers than estimated in February.
More than three-quarters of Americans say the bull market has had little or no effect on their financial well-being, according to a Bloomberg National Poll. Seventy-seven percent of respondents dismissed the S&P 500’s gains since the financial crisis, according to the poll, taken March 7-10. Barely one in five -- 21 percent -- said the market’s gains have made them “feel more financially” secure.
Investors have added $12.8 billion to U.S. equity exchange-traded funds in the past five days and withdrawn $2.4 billion from bond ETFs, data compiled by Bloomberg show. Real-estate stocks absorbed the most money among industry ETFs, taking in $156 million during the past week.
The Chicago Board Options Exchange Volatility Index (VIX), a gauge for U.S. stock volatility, fell 2.2 percent to 14.47 today. The measure has advanced 5.5 percent this year.
Six of 10 main industries in the S&P 500 declined today. Industrial shares and phone companies lost 0.2 percent. Utilities rose 1.3 percent.
Newmont Mining increased 2.7 percent to $25.01 and Barrick Gold rose 2.6 percent to $20.34. Gold rallied 1.8 percent, advancing to the highest level in almost six months as tension in Ukraine spurred demand for a haven.
EPL Oil & Gas climbed 29 percent, its biggest gain on record, to $37.50. Energy XXI agreed to buy the company to become the largest public independent producer on the Gulf of Mexico shelf.
Energy XXI fell 7.8 percent to $21.54. The company has sought to grow through acquisitions and the use of horizontal drilling to help boost oil recovery. The combined entity, termed independent because it won’t have refineries, will pump 65,000 barrels of oil equivalent a day, of which 70 percent will be crude.
Oxigene Inc. jumped 77 percent to $4.29 for its biggest gain since 2003. The pharmaceutical company said a second-phase trial showed its Zybrestat drug helped fight ovarian cancer.
PulteGroup dropped 1.3 percent to $19.67 and Toll Brothers fell 0.6 percent to $37.77. Credit Suisse analyst Dan Oppenheim cut both stocks’ ratings to neutral from outperform, citing continued weakness in demand and lower buyer traffic.
Herbalife tumbled 7.4 percent to $60.57. The nutrition company that hedge fund manager Bill Ackman has accused of being a pyramid scheme said it is confident it is in compliance with all laws and will cooperate with the FTC investigation.
Urban Outfitters Inc. (URBN) fell for a third day, declining 1.7 percent to $35.29, as Barclays Plc downgraded the company to equal-weight from overweight. The Philadelphia-based teen-clothing retailer said yesterday it expects poor weather to contribute to lower sales and profit margins in the first quarter for its Urban Outfitters-branded shops.
Express (EXPR) Inc. slumped 12 percent to $16.05. The retailer forecast earnings will be between 12 cents a share and 18 cents in the first quarter, missing the average analyst projection for 41 cents. The company reported fourth-quarter profit of 57 cents a share, trailing the 59-cent estimate.
Progressive Corp. dropped 3.8 percent to $23.58 for the biggest loss in the S&P 500. The insurer’s operating earnings of 7 cents a share for February was less than an estimate of 13 cents from Keefe Bruyette & Woods Inc. analyst Meyer Shields.
Shields cited weak underwriting results in personal lines for Progressive’s earnings miss in a note today and lowered his full-year earnings forecast.