Photographer: Krisztian Bocsi/Bloomberg

European Shares Slide While Emerging Stocks Rise With Copper

Updated on

The dollar dropped versus major peers amid concern the U.S. economic recovery is losing traction, while gains in Netflix Inc. helped stem a retreat in American stocks. Greek bonds slid, while crude oil climbed a sixth day.

The Bloomberg Dollar Spot Index fell a third day, losing 0.7 percent by 5 p.m. in New York amid losses of at least 0.7 percent against the euro and the Australian dollar. The Standard & Poor’s 500 Index ended the day down 0.1 percent after nearing a record. Netflix surged 18 percent to an all-time high while SanDisk Corp. led chipmakers lower. Greek 10-year yields jumped to the highest level in more than two years. U.S. oil settled at its highest price since Dec. 23.

Signs the world’s largest economy may be losing momentum have been building, with U.S. housing starts rising less than estimated in a report Thursday, while jobless claims unexpectedly increased last week. Greece is facing a financing crunch that Germany’s finance minister says isn’t likely to be resolved before a meeting of euro-area lawmakers next week. Speculation U.S. output is slowing is fueling oil’s rebound.

“The market has been recognizing that first quarter is slower than the fourth,” Robert Lynch, head of currency strategy at HSBC Holdings Plc in New York, said by phone. “In recent weeks, it has stalled the dollar rally.”

The greenback lost 0.7 percent to $1.0767 per euro in a third day of declines, while the Aussie jumped 1.6 percent and reached its highest level since March 27. The yen has made gains every day since April 10, and traded at 119.02 per dollar, near its strongest price in two weeks. The Swedish krona jumped 1.6 percent, its steepest one-day gain since October last year.

Fed Fluctuations

Investors are mulling U.S. data as they try and determine the Federal Reserve’s likely path on interest rates. Officials from the U.S. central bank continued to provide conflicting signals Thursday, spurring fluctuations in Treasuries. Ten-year yields ended the session little changed at 1.89 percent after swinging between gains and losses.

Fed Vice Chairman Stanley Fischer sent Treasuries tumbling after reminding investors that the central bank wants to boost key borrowing costs. The Fed can’t hold rates near zero forever, he said. Fed Bank of Atlanta President Dennis Lockhart then halted the selloff, saying he wanted to see both falling unemployment and quickening inflation prior to the first rate increase.

Stock Moves

In equity markets, the Dow Jones Industrial Average ended the day little changed, while the Nasdaq Composite Index dropped 0.1 percent, even as Netflix climbed. The company jumped after reporting that subscribers to its video-streaming service topped 62 million subscribers globally after markets closed Wednesday.

The S&P 500 has zigzagged in the six weeks since reaching its last record March 2, twice closing less than 0.5 percent below the high, as mixed economic data and dueling comments from Fed officials kept investors guessing. The index has been stuck in a range of 52 points since March 20, as weaker-than-forecast data from hiring to manufacturing elevated concern about earnings while at the same time bolstered the case for keeping rates lower for longer.

“We’re right up near the all-time highs in the S&P, and sometimes you take a breather before you break through those levels,” Matt Maley, an equity strategist at Miller Tabak & Co. in Newton, Massachusetts, said by phone.

The Philadelphia Semiconductor Index slipped 0.5 percent Thursday as SanDisk forecast missed estimates.

Earnings Season

Goldman Sachs Group Inc. and Citigroup Inc. reported profits that beat analysts’ estimates. Earnings at S&P 500 companies probably fell 5.6 percent in the first three months of the year and will decline each quarter through September, according to analysts’ estimates compiled by Bloomberg.

UnitedHealth Group Inc. climbed 3.7 percent, the biggest gain on the Dow, after the company, which is the largest U.S. health insurer, raised its 2015 forecast and posted profit that topped analysts’ estimates.

In Europe, the Stoxx 600 index has rallied 20 percent this year, bettering all-time highs as equity gauges in Denmark, Portugal and Italy surged more than 24 percent. The gauge slipped from a record Thursday, as chemical makers and banks led declines among 19 industry groups. Germany’s DAX Index dropped 1.9 percent and Portugal’s PSI-20 dropped 2.4 percent.

The broader gauge ended Wednesday at a fresh peak after European Central Bank President Mario Draghi said monetary policy is helping the economic recovery and quantitative easing will continue until there’s a sustained improvement in inflation.

‘Unwinding Day’

“It’s an unwinding day today, everything that has made investors money recently is in reverse mode,” Daniel Weston, Munich-based chief investment officer at Aimed Capital GmbH. “Portfolio managers are looking to lock in profits from the best performing stocks. It’s a typical risk-off day.

The Shanghai Composite Index jumped 2.7 percent to its highest close since March 2008 and the Hang Seng China Enterprises Index of mainland shares listed in Hong Kong increased 0.5 percent.

China’s central bank will inject more cash into banks, cut the amount of reserves lenders must keep, reduce interest rates and steer money market levels lower, according to banks including Macquarie Group Ltd., HSBC Holdings Plc and Nomura Holdings Inc.

More Stimulus

‘‘China’s rebound shows the prevailing market perception that the weak economy will spur more stimulus measures,” said Allan Yu, who helps manage about $7.5 billion as first vice president at Manila-based Metropolitan Bank & Trust Co. “The data supports the outlook that a U.S. rate increase will come later than sooner and any adjustment will be slow and measured.”

Yields on Greek note due July 2017 surged 407 basis points, or 4.07 percentage point, to 28.15 percent Thursday. S&P downgraded Greek debt on Wednesday, citing the cash-strapped country’s deteriorating economic outlook.

German Finance Minister Wolfgang Schaeuble ruled out further concessions to Greece in a Bloomberg Television interview in New York on Wednesday, saying it’s up to the Greek government to commit to the reforms needed to release aid rather than give false hopes to its people.

West Texas Intermediate for May delivery added 0.6 percent to $56.71 a barrel, while Brent crude gained 66 cents to $63.98 a barrel in London. Crude supplies increased last week at the smallest pace since January, the Energy Information Administration said. Prices also gained as the dollar weakened and the crisis in Yemen spread.

Oil fell earlier in the Thursday session as Saudi Arabia said it increased crude output by 658,800 barrels a day in March to an average of 10.294 million, according to data the country communicated to the Organization of Petroleum Exporting Countries’ secretariat in Vienna.

Copper rose the most in three months, adding 1.8 percent to settle at $6,060 a metric ton ($2.75 a pound) in London. The Bloomberg Commodity Index climbed 0.9 percent in a third day of gains.

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