U.S. Stocks Advance as Apple Rebounds; Euro, Oil Retreat

Stocks Rise on U.S. Budget Talks as Metals Fall, Euro Fluctuates
A financial trader monitors data on computer screens at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg

U.S. stocks rose for a second day as Apple Inc. rebounded following its worst drop in four years and investors weighed prospects for a budget deal in Washington. Treasuries pared early gains. The euro and oil fell.

The Standard & Poor’s 500 Index added 0.3 percent to 1,413.94 at 4 p.m. as Apple rallied 1.6 percent. Ten-year Treasury yields were little changed at 1.58 percent after losing as much as 2.6 points. The Stoxx Europe 600 Index climbed 0.7 percent, maintaining gains after the European Central Bank cut its economic forecasts. The euro weakened against all 16 peers as ECB President Mario Draghi said there was a “wide discussion” on interest rates. Oil fell to a three-week low.

A few dozen Republicans joined a bipartisan push to break an impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest-earning Americans, signing a letter calling for openness to “all options.” Reports today showed the euro area’s economy shrank in the third quarter while fewer Americans filed for jobless claims last week. Apple, the biggest company by market value, contributed the most to the advance in the S&P 500.

“Apple stock is taking a breather after a sharp selloff and that’s helping the overall market,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “Most analysts continue to like their story. We’re seeing some validation of that. In addition, the jobless claims were better than expected. The data suggest that U.S. economy continues to heal and that will be the case as long as we don’t fall off the fiscal cliff.”

Economic Data

The S&P 500 climbed 0.2 percent yesterday, halting a two-day drop. Technology and consumer shares led gains among the 10 main industry groups today, while utility, telephone and health-care companies retreated.

Apple rebounded today after slumping 6.4 percent yesterday amid concern about competition in the smartphone and tablet markets. Akamai Technologies Inc. rallied 10 percent for the best gain in the S&P 500 after forging a deal with AT&T Inc. to provide the carrier’s business customers with content-delivery services. Starbucks Corp. jumped 5.7 percent after Robert W. Baird & Co. advised buying the shares.

Garmin Ltd., a maker of mobile navigation systems, rallied 5.7 percent after S&P said the company will replace R.R. Donnelley & Sons Co. in the S&P 500. Freeport-McMoRan Copper & Gold Inc. dropped 4.2 percent after being cut at BMO Capital Markets.

Jobless Claims

Jobless claims decreased by 25,000 to 370,000 in the week ended Dec. 1, Labor Department figures showed. The median forecast of 52 economists surveyed by Bloomberg called for a drop to 380,000. Data tomorrow is forecast to show U.S. payrolls rose by 86,000 workers last month, the smallest gain since June, according to the median forecast of economists.

The Stoxx Europe 600 Index advanced 0.7 percent as two shares gained for each that fell, with chemical, commodity and retail companies leading gains. European Aeronautic, Defence & Space Co. climbed 8.2 percent after the company said Germany will join France and Spain as a government shareholder in the largest revamp of ownership since the creation of EADS 12 years ago.

European Movers

GDF Suez SA plunged 11 percent, the most in four years, after Europe’s largest utility by market value said earnings will drop next year because of a “challenging” economy. Saipem SpA tumbled 6.7 percent, the biggest decline in more than a year, as Chief Executive Officer Pietro Franco Tali resigned amid an Italian probe into Algeria contracts awarded to the oil contractor.

Rolls-Royce Holdings Plc slid 3.1 percent, the most in six months. Europe’s largest maker of commercial aircraft and ship engines said it unearthed possible wrongdoing in overseas business dealings and is under scrutiny by the U.K. Serious Fraud Office.

The euro retreated 0.8 percent against the dollar and 0.9 percent versus the yen as Draghi’s remarks stoked speculation that the ECB may consider interest-rate cuts.

The yield on Italy’s 10-year bond jumped 13 basis points to 4.57 percent as former Prime Minister Silvio Berlusconi threatened to stop supporting the government, risking the disintegration of the parliament coalition. While Prime Minister Mario Monti’s government survived a confidence vote on a growth package in the upper house, the majority of lawmakers with Berlusconi’s People of Liberty party didn’t take part in the vote or abstained.

The yield on 10-year Spanish notes rose seven basis points to 5.47 percent. The yield on Germany’s 10-year bond fell five basis points to 1.30 percent.

Crude Slumps

Crude oil slumped 1.8 percent to a three-week low of $86.26 a barrel to help lead declines in 14 of 24 commodities tracked by the S&P GSCI Index. Copper futures dropped the most in four weeks, losing 1.1 percent, amid concern that persistent economic weakness in Europe will undercut demand. Wheat gained for a second straight day on speculation that dry weather may curb production in the U.S., the world’s biggest exporter.

The MSCI Emerging Markets Index advanced 0.4 percent to a seven-month high. Russia’s Micex Index rose 0.2 percent and India’s Sensex advanced 0.5 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE