The Standard & Poor’s 500 Index rose the most in a week, while crude oil and bonds slipped as diplomats from Ukraine and Russia discussed a possible truce and Kurdish forces made progress against militants in Iraq.
The S&P 500 (SPX) advanced 0.8 percent at 4 p.m. in New York, as Internet and biotechnology stocks rallied to four-month highs. The Stoxx Europe 600 Index rose 1.2 percent. Brent crude declined to a 14-month low and gold fell for a second session. Ten-year Treasury yields rose five basis points to 2.39 percent. The dollar gained versus the euro after U.S. homebuilder data boosted optimism about the economy.
Ukraine and Russia made some progress in “difficult” talks in Berlin, according to German Foreign Minister Frank-Walter Steinmeier, while his Russian counterpart said the meeting is yet to produce a resolution. Kurdish forces retook control of Iraq’s largest dam. Israel and Palestinian militants agreed to extend their truce, media on both sides of the conflict reported. Confidence among U.S. homebuilders rose in August to the highest level in seven months, according to a sentiment measure. Federal Reserve-meeting minutes are due and central bank officials meet in Jackson Hole, Wyoming, later this week.
“People that were concerned about the possibility of a serious deterioration of the Russia-Ukraine situation and had no idea what was going to happen over the weekend came in this morning with a different perspective,” Marshall Front, chief investment officer at Chicago-based Front Barnett Associates LLC, said via phone. His firm manages $800 million. “The market opened up higher, and we’ve been creeping up since then with some positive housing sentiment figures that added to it.”
Ukrainian Foreign Minister Pavlo Klimkin met his Russian counterpart Sergei Lavrov for more than five hours of talks in Berlin, as they sought to ease tension after officials in Kiev said troops had partially destroyed an armed convoy from Russia.
Among U.S. stocks moving today, Dollar General Corp. surged 12 percent to a record after offering $9.7 billion for Family Dollar Stores Inc. Family Dollar rallied 5 percent. An S&P index of housing stocks jumped 2.1 percent on the confidence report. Delta Air Lines Inc. rose 1 percent, while Southwest Airlines Co. added 3.6 percent on falling oil prices.
Yahoo! Inc. rallied 2.5 percent, sending the Dow Jones Internet Composite Index to the highest since March. The Nasdaq Biotechnology Index jumped to its best close in five months. Both indexes have recovered most of their losses from March and April, when investors sold off the best performers during the five-year bull market amid concern valuations had become too expensive.
The S&P 500 fell as much as 3.9 percent from a record reached on July 24 amid growing concern over global conflicts from Ukraine to Gaza and Iraq. The benchmark index gained 1.2 percent last week as data showing an uneven economic recovery boosted speculation that the Federal Reserve won’t raise rates sooner than anticipated. It is 0.8 percent below its all-time high.
The central bank remains on pace to wind down its monthly bond purchases in October, while Fed Chair Janet Yellen has said officials will keep its benchmark interest rate low for a “considerable time” after that. The Fed releases minutes from its July meeting on Aug. 20.
Clothing retailer Urban Outfitters Inc. is reporting earnings today. About 76 percent of S&P 500 companies that have posted results this season have beaten analysts’ estimates for profit, while 65 percent exceeded sales projections, according to data compiled by Bloomberg.
Brent for October settlement dropped 1.9 percent to close at $101.60 a barrel in London. West Texas Intermediate crude slipped 1 percent to $96.41 per barrel in New York, extending last week’s 0.3 percent drop, its fourth straight weekly loss.
Iraqi and Kurdish forces retook control of the Mosul Dam, Iraqiya television reported, citing military spokesman Qassem Ata. The U.S. widened its airstrikes in Iraq at the weekend to help secure the dam near Mosul, Iraq’s largest northern city, after it was seized by Islamist militants. Iraq is OPEC’s second-biggest oil producer.
Gold dropped 0.5 percent to $1,299.30 an ounce in New York. Silver climbed 0.6 percent to $19.650 an ounce, after last week declining for a fifth consecutive week. Palladium rose less than 0.1 percent to settle at $894.90 an ounce, after earlier topping $900 an ounce for the first time since 2001.
The MSCI Emerging Markets Index added 0.3 percent for a sixth day of gains, extending the biggest weekly gain since March. India’s S&P BSE Sensex (SENSEX) index advanced for a fifth day, adding 1 percent, while Russia’s Micex (INDEXCF) index gained 0.5 percent for a seventh day of advances, the longest winning streak in 11 months.
Yields on 10-year Treasuries rose after falling the past three trading days, including a six basis-point drop Aug. 15. Inflation in the U.S. probably slowed to 2 percent in July from a year earlier, down from 2.1 percent price growth in June, according to a Bloomberg survey of economists before tomorrow’s data.