U.S. stocks rose, paring the worst weekly drop for the Standard & Poor’s 500 Index since November, amid better-than-estimated earnings and Group of 20 nation talks aimed at bolstering the global economy. The yen weakened, gold climbed above $1,400 an ounce and oil advanced.
The S&P 500 gained 0.9 percent at 4 p.m. in New York, trimming its weekly loss to 2.1 percent. The Dow Jones Industrial Average’s gain was limited to less than 0.1 percent as International Business Machines Corp. plunged the most in eight years after earnings trailed estimates. The yen tumbled at least 1 percent against all 16 major peers. Ten-year Treasury yields climbed two basis points to 1.70 percent. Gold for immediate delivery rose for a fourth day and oil gained for a second, while copper slid into a bear market. The pound weakened as Britain lost its top credit grade at Fitch Ratings.
Capital One Financial Corp., Chipotle Mexican Grill Inc. and Microsoft Corp. climbed at least 3.4 percent to help lead the market higher after reporting quarterly results that beat estimates. G-20 finance chiefs handed Japan leeway to reflate its stagnant economy by indicating its fresh round of monetary stimulus doesn’t contravene a pact to avoid a currency war.
“Earnings have more of an impact on the market at this time of the year,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $380 billion, said by phone. “Macro issues are taking a bit of a backseat as investors stop to listen to what management teams have to say. Today’s reports have been mainly good with the exception of IBM.”
Trading volume for S&P 500 stocks was 16 percent higher than the 30-day average. U.S. options contracts expire today, leading investors to adjust their holdings of some stocks.
The S&P 500 retreated 3.3 percent from its record close on April 11 through yesterday, spurring concern over what UBS AG strategist Jonathan Golub called a “spring break” in equities. Stocks began short-term declines in April of each of the last three years. The benchmark measure had surged as much as 136 percent from a 12-year low in 2009 as the Federal Reserve embarked on three rounds of bond purchases to stimulate the economy.
Boeing Co. rallied 2.1 percent after winning U.S. approval to return its 787 Dreamliner to service with a redesigned lithium-ion battery, more than three months into the government’s longest grounding of a commercial model in the jet age.
IBM slid almost 8.3 percent, the most since April 2005, after the computer-services provider posted profit that trailed projections for the first time since 2005, hurt by a hardware slump and failure to sign customers to contracts. IBM, which accounts for 10 percent of the price-weighted Dow average for its heaviest weighting, by itself took 131.7 points off the 30-stock gauge today, limiting the average’s advance to 10 points.
“IBM’s drop is weighing down on the Dow today,” Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which oversees about $130 billion, said by telephone. “Capital is selectively flowing to where growth is the best. We’re seeing a little of bit growth here in the U.S. and that’s helping investor returns overall.”
General Electric Co., the largest maker of jet engines, fell 4.1 percent and McDonald’s Corp., the biggest restaurant chain by sales, declined 2 percent after profit matched analysts’ estimates.
Earnings beat estimates at 72 percent of the 103 companies in the S&P 500 that posted results so far this season, while less than 50 percent exceeded revenue projections, according to data compiled by Bloomberg.
The Stoxx Europe 600 Index climbed 0.5 percent for the first advance in six days. The gauge lost 2.5 percent this week, the biggest drop since November.
Kazakhmys Plc surged 24 percent and Vedanta Resources Plc rallied 6.1 percent as a gauge of European mining companies rebounded from a 3 1/2-year low. L’Oreal SA rose 4.3 percent after the world’s largest cosmetics maker reported an increase in first-quarter revenue.
The euro was little changed $1.3056, while climbing against 11 of 16 major peers. German Finance Minister Wolfgang Schaeuble said the European Central Bank should reduce liquidity in the euro area, according to Wirtschaftswoche magazine.
The pound weakened against 14 of 16 major peers, losing more than 0.8 percent against the South Korean won and Brazilian real and slipping 0.3 percent to $1.5229. Fitch lowered the U.K. to AA+ from AAA on a weaker economic and fiscal outlook. It cut its growth projection and forecast that debt would peak at 101 percent of gross domestic product in the fiscal year 2015-2016.
The MSCI Emerging Markets Index climbed 1.2 percent, rebounding from the lowest level since November. The gauge has fallen 4.3 percent this year, compared with a 6.2 percent increase in the MSCI World Index of developed countries. Benchmark indexes in Brazil, the Czech Republic and South Africa rallied more than 1 percent.
Fund flows into developed-market equities beat emerging-market peers for a ninth week, Citigroup Inc. analysts led by Markus Rosgen wrote in a report, citing EPFR data. Inflows into developed equities were dominated by the U.S. and Japan, while emerging-market equities saw $964 million outflows, they wrote.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 3.1 percent today. China’s economy may rebound in the second and third quarters of the year, Zhu Baoliang, head of the State Information Center’s economic forecast department, said at a forum in Beijing. Taiwan’s Taiex Index climbed 1.8 percent after Taiwan Semiconductor Manufacturing Co., the world’s largest contract maker of chips, forecast record quarterly sales.
China’s yuan strengthened against the dollar after the central bank signaled plans to widen a trading band that’s been limiting appreciation since October. Thailand’s baht advanced to a 16-year high, reversing earlier losses, even after central bank Governor Prasarn Trairatvorakul said the currency has started to move beyond its fundamentals.
The yen depreciated for a fourth day against the dollar, sliding 1.4 percent to 99.55. It also declined 1.4 percent against the euro. Meeting for the first time since the Bank of Japan unleashed new measures aimed at delivering 2 percent inflation within two years, G-20 finance ministers and central bankers said today in Washington that those actions are “intended to stop deflation and support domestic demand.” They echoed their promise of February that nations will refrain from “competitive devaluation.”
Gold for immediate delivery pared gains after climbing as much as 2.6 percent to $1,426.05 an ounce. It fell 9.1 percent on April 15, the most in three decades. Prices fell about 5.5 percent this week, the fourth weekly decline, on concern European governments will follow Cyprus in selling reserves.
Copper slumped into a bear market in London and New York, capping the biggest weekly drop in 16 months, on concern that slowing economies from China to the U.S. will reduce demand as supply of the metal expands. Copper for delivery in three months fell 1.4 percent to close at $6,990 a metric ton on the LME today, marking a 20 percent drop from the February 2012 closing high.
China’s economy has grown by less than 8 percent in the past four quarters, the longest streak in at least 20 years. An index of leading U.S. leading economic indicators released yesterday unexpectedly fell. Copper inventories tracked by the London Metal Exchange almost doubled in 2013.
Fourteen of the 24 commodities tracked by the S&P GSCI Index advanced, sending the gauge up 0.3 percent and trimming its weekly decline to 2.5 percent. Crude oil for May delivery rose 28 cents to settle at $88.01 a barrel on the New York Mercantile Exchange.
European Union emission permits rose 2.9 percent after yesterday’s 12 percent gain. The allowances dropped 42 percent on April 16 and 17 when the European Parliament rejected a proposed change to the region’s emissions-trading law that would have curbed the supply of permits temporarily.
The won rose versus 15 of 16 major counterparts, climbing to the strongest level versus the yen since October 2008. South Korean Finance Minister Hyun Oh Seok said Japan’s weakening currency is hurting his country’s economy more than North Korean threats.