Stocks, Commodities Rise as Yen Weakens; Treasuries Drop

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Stocks, Commodities Rise as Yen Weakens; U.S. Treasuries Decline
Chesapeake Energy Corp., Sirius XM Radio Inc. and Fossil Inc. were among U.S. stocks that rallied after reporting earnings. Photographer: Daniel Acker/Bloomberg

Stocks rose, sending the Standard & Poor’s 500 Index to a three-month high, commodities climbed and the yen slid amid better-than-estimated corporate earnings and speculation central banks will boost efforts to lift growth.

The S&P 500 added 0.5 percent to 1,401.35 at 4 p.m. in New York in a third straight day of gains. The Stoxx Europe 600 Index added 0.8 percent to reach a four-month high. Standard Chartered Plc tumbled the most since at least 1988 after a U.S. regulator said the lender may face a suspension of business activities. The yen depreciated against all 16 major counterparts while the Dollar Index was little changed. U.S. Treasuries remained lower after a $32 billion auction. Gasoline surged more than 2 percent to lead commodities higher.

Chesapeake Energy Corp., Sirius XM Radio Inc. and Fossil Inc. were among U.S. stocks that rallied after reporting earnings. Federal Reserve Bank of Boston President Eric Rosengren told CNBC the central bank should pursue an “open-ended” easing program of “substantial magnitude” to boost growth and hiring amid a global slowdown. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday.

“Any shift in sentiment can result in a powerful move upward in the market,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.5 billion. “Earnings have come in well above expectations. Expectations about Fed action help and there’s more confidence today that Europe is inching closer to a credit plan to avert a financial crisis.”

Market Leaders

Commodity, consumer and industrial shares helped lead gains among the 10 main groups in the S&P 500 today while Cisco Systems Inc., Boeing Co. and JPMorgan Chase & Co. rose at least 2 percent for the biggest gains in the Dow Jones Industrial Average, sending the 30-stock gauge up 51 points to 13,168.6.

Fossil, the maker of jewelry and leather goods, rallied 31 percent after its profit and earnings forecast topped estimates amid increasing sales of its Skagen brand. Chesapeake Energy, the second-largest U.S. natural-gas producer, jumped 9.4 percent after reporting the highest quarterly profit in company history and boosting its asset-sales target to plug a looming funding shortfall. Sirius XM Radio gained 4.6 percent after adding subscribers and boosting its forecast.

Earnings have topped analysts’ average estimate at about 72 percent of the S&P 500 companies which reported second-quarter results so far, according to data compiled by Bloomberg.

More than four shares rose for each that declined in the Stoxx 600. Xstrata Plc climbed 1.6 percent and Danske Bank A/S added 6.7 percent after they reported earnings that beat estimates. Standard Chartered tumbled 16 percent, the most in almost 24 years, after a U.S. regulator said the lender faces suspension of business activities because of transactions with Iranian banks. Nestle fell 1 percent.

Elan Drops

Elan Corp. sank 8.7 percent to its lowest price this year. The Irish drugmaker wrote down to zero the value of its venture with Johnson & Johnson to develop an Alzheimer’s treatment.

Among the 24 commodities tracked by the S&P GSCI Index, gasoline and Brent crude rallied at least 2 percent to lead gains.

Gasoline rose to a 12-week high, climbing 2.4 percent to $2.9913 a gallon, as refinery shutdowns increased supply concerns and stronger Brent crude boosted the cost of shipments of fuel from abroad and imported oil used at U.S. plants. Oil climbed 1.6 percent to $93.67 a barrel in New York, the highest settlement since May 15.

Treasury Auction

The yield on the 10-year U.S. Treasury note rose six basis points to 1.62 percent. U.S. notes remained lower following the sale of $32 billion of three-year notes at a higher yield than forecast. The securities, which mature in August 2015, drew a yield of 0.370 percent, compared with the average forecast of 0.361 in a Bloomberg News survey of seven of the Federal Reserve’s 21 primary dealers.

Spain’s 10-year yield rose 12 basis points, reversing an earlier decline, while its two-year rate climbed 36 basis points. The yield on Italy’s 10-year bond fell three basis points, paring steeper declines, and similar-maturity Portuguese debt yields declined 42 basis points.

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