U.S. stocks and commodities climbed, with oil posting its biggest gain of the year, after bigger-than-forecast increases in American durable-goods orders and home prices bolstered optimism in the world’s largest economy. Treasuries erased earlier losses.
The Standard & Poor’s 500 Index advanced 0.8 percent to 1,563.77 at 4 p.m. in New York, closing within two points of its 2007 record, while Mexico’s IPC Index jumped 1.8 percent for its best gain since January 2012. Oil rallied 1.6 percent, while natural gas led the S&P GSCI Index of commodities higher on forecasts for cold U.S. weather. Ten-year Treasury yields decreased one basis point to 1.91 percent after rising two points earlier. The euro was little changed versus the dollar while the yen weakened against all 16 major peers.
All 10 of the main industry groups in the S&P 500 advanced and the Dow Jones Industrial Average returned to a record. Bookings for U.S. goods meant to last at least three years rose 5.7 percent in February, the most since September, the Commerce Department said, while the S&P/Case-Shiller index of home prices increased by the most since 2006. The data overshadowed a worse-than-forecast decline in U.S. consumer confidence.
“We’ve seen really a resilient market, in contrast to what we saw through much of last year. We get a little pullback in the market like we did yesterday and people look at that as an opportunity to buy,” Brad Sorensen, director of market and sector analysis at Charles Schwab Corp., said in a phone interview. The San Francisco-based firm has $2.01 trillion in client assets. “The home story, the trends have been pretty positive for the past six months at least. One number that’s a little bit less-than-expected is not going to rattle too many people.”
The S&P 500 rebounded from yesterday’s 0.3 percent decline, triggered after the bailout of Cyprus spurred concern bank deposits in other euro-area nations may be subject to levies to pay for rescues in the future. Early gains in the market yesterday sent the S&P 500 to within 1 point of its 2007 record and today it closed within two points of the high.
Gauges of health-care, energy and consumer-staples companies helped lead the advance in the 10 main industry groups in the S&P 500.
Boeing Co., Intel Corp. and Hewlett-Packard Co. rose more than 2 percent for the biggest gains in the Dow, sending the 30-stock average up 111.9 points to 14,559.65.
Monsanto Co. jumped 4.4 percent as the company and DuPont Co. agreed to dismiss their respective antitrust and soybean patent lawsuits. Netflix climbed 5.4 percent after Pacific Crest Securities LLC raised its price target on the shares. Clothing retailers retreated, with Gap Inc. and Macy’s Inc. losing at least 0.9 percent, after the International Council of Shopping Centers cut the top end of March sales forecast.
Benchmark indexes rallied all day after the S&P/Case-Shiller index of property values in 20 cities increased 8.1 percent in January from the same month in 2012, exceeding the 7.9 percent median forecast by economists in a Bloomberg survey.
Another report showed the Conference Board’s index declined to 59.7 from a revised three-month high of 68 in February as Washington’s budget battle soured views of the economic outlook. Economists surveyed by Bloomberg projected the March measure would fall to 67.5. New-home sales declined 4.6 percent, worse than the 3.9 percent median estimate. Sales still capped the best back-to-back months in more than four years, spurred by near record-low borrowing costs and improving job prospects.
“The overall trend continues to show improvement for the U.S. despite some of the fiscal challenges,” Henk Potts, who helps oversee $282 billion as an equity strategist at Barclays Plc in London, said in a phone interview. “Markets don’t go up in a straight line, and there is potential for pullbacks, but we still believe the fundamentals are very supportive.”
The Stoxx Europe 600 Index added 0.2 percent with gains led by financial and construction stocks. Telephone companies dropped as Telefonica SA slipped 5 percent when trading resumed after a suspension. The Spanish mobile-phone operator is selling 990 million euros of treasury stock to reduce its debt. Telecom Italia SpA dropped 5.5 percent as Barclays Plc and Bank of America Corp. downgraded the stock.
Celesio AG gained 4 percent after the German drug wholesaler reported that earnings before interest, taxes, depreciation and amortization climbed in 2012.
Italy’s 10-year bond yield slipped four basis points to 4.57 percent and Spain’s dropped three basis points to 4.93 percent. The advance pared some of yesterday’s decline, which sent yields for both up 10 basis points. European Central Bank executive board member Benoit Coeure said today the institution will do everything it can within the terms of its mandate to preserve the euro.
With the yields of the euro area’s most-indebted nations getting support from the ECB, the region’s safest bonds are proving the best indicator of risk amid turmoil in Cyprus.
While Spanish and Italian bonds weathered events from Cyprus over the past 11 days, yields on German securities, along with those of French, Austrian and Belgian debt, fell as investors sought haven assets. The rate on two-year German notes fell below zero on March 18 for the first time since Jan. 2, while Austria’s 10-year yield dropped to a record on March 22.
Italian borrowing costs dropped at the sale of 8.5 billion euros ($10.9 billion) six-month bills today. The rate decreased to 0.831 percent, from 1.237 percent at an auction of similar-maturity debt Feb. 26.
Democratic Party leader Pier Luigi Bersani has two days left to overcome a shortfall of support in parliament, after President Giorgio Napolitano gave him a mandate on March 22 to try to form a government. Bersani will meet adversary Silvio Berlusconi’s deputies at the People of Liberty party today.
“With the political risk in Italy continuing, it will be hard for the euro to make any headway,” said Yuki Sakasai, a foreign-exchange strategist at Barclays Plc in New York.
The S&P GSCI gauge of 24 commodities advanced for a third day, rising 0.9 percent. U.S. natural gas futures gained for the first time in five days, rising as much as 3.3 percent. Matt Rogers, president of Commodity Weather Group LLC, said the Midwest and East will see seasonal to below-average temperatures in the next 10 to 15 days. Oil climbed 1.6 percent to a five-week high of $96.34 a barrel.
The MSCI Emerging Markets Index added 0.5 percent, gaining for a second day as benchmark gauges in Thailand and the Philippines added at least 1 percent. The Shanghai Composite Index fell 1.3 percent, the most in a week, after the China Securities Journal said many banks started to control the scale of loans for property development.
Fomento Economico Mexicano SAB, a distributor of Coca-Cola, jumped 4.4 percent to help lead the gain in Mexico’s IPC Index and Mexico’s peso touched an 18-month high as the U.S. data bolstered the outlook for the nation’s biggest export market. Brazil’s Bovespa rebounded from an eight-month low.