The Standard & Poor’s 500 Index climbed to an all-time high as reports showing increases in durable-goods orders and consumer confidence boosted optimism in the world’s largest economy. Emerging-market stocks retreated while gold and grains declined.
The S&P 500 rose 0.6 percent to 1,911.91 at 4 p.m. in New York. The Russell 2000 Index of smaller companies rallied 1.4 percent. The MSCI All-Country World Index gained 0.2 percent to the highest level since November 2007, while the MSCI Emerging Markets Index lost 0.9 percent as Russia’s Micex (INDEXCF) dropped 2.2 percent. Ten-year Treasury yields were down two basis points at 2.51 percent. Sugar, gold, corn and wheat lost more than 1 percent to help lead commodities lower.
U.S. durable goods orders rose for a third month in April, a sign factories will help the economy strengthen. Other data showed consumer confidence increased in May, while home prices in 20 U.S. cities rose at a slower pace in the year ended in March. The value of equities worldwide climbed to a record $63.8 trillion yesterday, a public holiday in the U.S. and the U.K. European Central Bank President Mario Draghi signaled yesterday a readiness to act on low inflation, while China’s premier said he may fine-tune economic policy.
“The stock market is continuing to sense there is something positive on the horizon,” Gene Peroni, portfolio manager at Advisors Asset Management Inc. in Conshohocken, Pennsylvania, said in a phone interview. His firm oversees about $14.7 billion in assets. “At some point, investors are going to recognize, despite the negativity that’s been broadcast, the market is really behaving well.”
The S&P 500 extended a record today after rising 1.2 percent last week on better-than-estimated economic data. The Russell 2000 increased 2.1 percent last week to end a two-week slide.
Investors are returning to smaller companies and technology stocks as the Russell 2000 and the Nasdaq Composite have advanced more than 3 percent over four sessions. The shares had borne the brunt of a selloff since early March amid valuation concerns, with declines in both gauges approaching 10 percent.
The S&P 500 is trading at 16.2 times the average projected earnings of its members, up from a multiple of 14.8 on Feb. 3, according to data compiled by Bloomberg.
The Chicago Board Options Exchange Volatility Index rose 1.3 percent today to 11.51. The gauge of U.S. equity volatility known as the VIX dropped 8.7 percent last week to 11.36, its lowest level since March 2013.
Traders are loading up on VIX call options as history shows there’s a good chance stock-market volatility is about to increase. Calls on the measure, which become more valuable during times of market stress, outnumbered ones betting on a decrease in market swings by 3.4-to-1 this month, the most since 2008, data compiled by Bloomberg show. The index has closed below 15 for the past 27 days. A study from Sundial Capital Research Inc. shows the gauge usually rises after reaching such low levels.
Investors have been watching tensions between Russia and Ukraine as well as developments in Thailand after last week’s coup. Ukraine’s government said it inflicted “significant” losses on pro-Russian rebels and retook a major eastern airport a day after President-elect Petro Poroshenko vowed to wipe out the separatists. The violence highlights that Poroshenko faces a difficult task of uniting Ukraine after his May 25 presidential election victory.
Data today showed bookings for goods meant to last at least three years rose 0.8 percent after a 3.6 percent gain in the prior month that was stronger than previously reported. The median forecast of 68 economists surveyed by Bloomberg called for a 0.7 percent drop.
The Conference Board’s index of U.S. consumer confidence increased to 83 in May from 81.7 a month earlier, the New York-based private research group said today. A Markit Economics preliminary index for services unexpectedly rose to 58.4 this month from 55.
The S&P/Case-Shiller index of property values increased 12.4 percent from March 2013, the smallest 12-month gain since July, after rising 12.9 percent in the year ended in February, a report from the group showed.
Nine out of 10 groups in the S&P 500 advanced today, with gauges of financial and technology shares rallying 1 percent to lead the advance.
Bank of America Corp. climbed 3.4 percent after resubmitting its capital plan to the Federal Reserve. Hillshire Brands Co. jumped 22 percent as JBS’s Pilgrim’s Pride Corp. unit made an unsolicited bid for the maker of Jimmy Dean sausages and Ball Park hot dogs. Cisco Systems Inc. rose 0.8 percent as Deutsche Bank AG analysts recommended buying the shares.
The Stoxx Europe 600 Index gained 0.2 percent, after a 0.6 percent advance yesterday as Italian Prime Minister Matteo Renzi’s party beat a populist challenger in European Parliament elections.
Accor SA rose 1.3 percent after Europe’s largest hotel operator agreed to buy hotels in Germany and the Netherlands for about 900 million euros ($1.23 billion). InterContinental Hotels Group Plc rallied 3.4 percent after a report that it rejected a takeover bid from the U.S. Exane BNP Paribas said the report may spark mergers and acquisitions in the industry.
Aveva Group Plc (AVV) jumped 8.8 percent after the U.K. maker of computer software reported profit that beat analysts’ estimates. AstraZeneca Plc fell 1.8 percent after Pfizer Inc. abandoned its effort to buy the U.K. drugmaker.
The MSCI All-Country World Index climbed for a fifth day. The MSCI AC Asia Pacific Index (MXAP) slipped 0.2 percent after gaining 0.4 percent yesterday for a third day of increases.
The MSCI Emerging Markets Index is headed for its fourth monthly increase, the longest streak since December 2009.
Russia’s Micex Index dropped 2.2 percent from the highest level since President Vladimir Putin’s incursion into Crimea. The ruble weakened for a second day, losing 0.5 percent against the dollar. Ukraine’s hryvnia strengthened. Ukraine’s President-elect Petro Poroshenko pledged to rein in separatists in the east of the country.
Gold dropped 2.1 percent to $1,265.67 an ounce as investors assessed whether the election of Ukraine’s president will ease tension with Russia, reducing the metal’s appeal as a haven.
India’s Sensex (SENSEX) lost 0.7 percent, dropping from a record close yesterday when its 14-day relative strength index reached 82. Some investors see readings above 70 as a signal to sell. The Sensex climbed 9.5 percent in May, its biggest monthly advance since January 2012. Narendra Modi, who was sworn in as prime minister yesterday, reduced India’s cabinet to the smallest size in 16 years in what he called an “unprecedented” overhaul.
The euro fell 0.1 percent to $1.3635 amid speculation the ECB is preparing to introduce further stimulus measures at a meeting next week. The euro is down 1.7 percent this month against the dollar, the most since a 1.9 percent drop in January.
Corn fell 1.7 percent on speculation U.S. farmers accelerated planting, with the U.S. Department of Agriculture scheduled to update progress today. Wheat declined to an 11-week low.
West Texas Intermediate crude oil lost 0.2 percent to $104.11 a barrel, retreating from a five-week high, on speculation that U.S. inventories are sufficient to meet increasing fuel demand. U.S. crude supplies, which rose in April to the highest level since the government began publishing weekly data in 1982, are near a record for the time of year.
To contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org Jeff Sutherland, Michael P. Regan