Selloffs Interrupted as U.S. Stocks, Dollar Rebound; Oil Drops

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U.S. stocks pared a weekly drop, as Gilead Sciences Inc. led a rebound from a selloff in biotechnology shares. The euro weakened from a two-month high versus the dollar, while Treasuries tumbled to the worst week since March.

The Standard & Poor’s 500 Index advanced 1 percent at 4 p.m., erasing Thursday’s selloff and paring its loss for the week to 0.5 percent. Expedia Inc. surged 7.6 percent as technology shares reversed losses from the prior day. The euro slipped 0.1 percent to $1.121, halting its longest rally since 2013. The yield on 10-year notes increased eight basis points to 2.11 percent. Gold slid 0.7 percent, following the biggest drop in almost eight weeks, while oil lost 0.8 percent.

The gains Friday in U.S. equities and the dollar stanched slides that came amid a reversal in April of some key trends, including the greenback’s first monthly decline since June and the end of a 15-month run of gains for euro-area bonds. American small caps also underperformed larger stocks for the first time in six months. Signs of growth in Europe and continued uneven data in America have investors assessing recent popular trades.

“This is a rebound from the tough days we had earlier this week,” David Heidel, a regional investment director for the private client reserve of U.S. Bank, which oversees about $128 billion of assets, said by phone. “People are taking a look at potential bargains, which is good. This week felt like an unwinding of a lot of big trading positions that had been on for months and that had been extremely successful.”

Weekly Slide

The S&P 500 nearly erased a weekly decline that came as investments that catapulted U.S. stocks to all-time highs in April turned sour as the month ended.

The Nasdaq Biotechnology Index jumped 2.9 percent, halting a five-day slide that wiped out more than 9 percent. Social media shares including Yelp Inc., LinkedIn Corp. and Twitter Inc. plunged more than 20 percent this week after reporting results.

Among stocks moving Friday, Gilead added 4.5 percent after first-quarter profit exceeded projections. Celgene Corp. and Biogen Inc. rose at least 2.3 percent after falling more than 2.5 percent Thursday. Expedia Inc. climbed after quarterly revenue exceeded estimates.

Data Friday showed consumer confidence increased in April, while manufacturing was unchanged, adding to a mixed economic picture as the Federal Reserve considers raising borrowing costs.

Data Watch

Fed officials repeated Wednesday that they will raise interest rates when there’s evidence of further improvement in job creation and inflation. Data Thursday showed gains in consumer spending, while separate reports added to evidence of an improving job market and a nascent acceleration in wage increases.

“A huge amount depends on the U.S. data,” said Adam Cole, the global head of currency strategy at RBC Capital Markets in London. “After the awful first-quarter data we got this week we’ve really got to see some evidence of things bouncing back. If we do, then the dollar-positive trend reasserts itself and that is our main expectation. On balance the euro will probably weaken from here.”

The slowdown in the U.S. comes amid signs that central-bank support is boosting growth in Europe. Consumer prices have ended a four-month run of declines, German unemployment continues to fall and Spain’s once crisis-addled economy grew the fastest in seven years in the first quarter.

Euro, Bonds

The euro earlier strengthened 0.4 percent to $1.1271 after surging 4.6 percent in April for the biggest monthly gain since September 2010.

Helping to fuel the euro advance, German government bonds declined Thursday, extending a selloff from Wednesday that wiped off about 55 billion euros from the value of euro-area debt.

U.K. government bonds rose Friday after data showed growth in manufacturing cooled in March, mortgage approvals declined and overseas investors bought the most gilts on record.

The drop in Treasuries left yields on 10-year notes 2019 basis points higher for the week. They reached 2.11 percent on Thursday, the highest since March 13.

Greek stocks posted the biggest gains in western Europe last month, with the benchmark gauge climbing 6.1 percent, amid optimism a deal over bailout aid will be reached.

Prime Minister Alexis Tsipras told his cabinet on Thursday that he’s confident a deal to unlock funding is close. Greece and its euro-area partners stepped up talks in a bid to reach a preliminary deal by May 3, ahead of debt payments in early May, three people with knowledge of the talks said earlier.

Japan, Gold

Japan’s Topix index fell, capping its biggest weekly drop in more than four months, after Bank of Japan Governor Haruhiko Kuroda said no further easing of monetary policy is needed at this time.

The MSCI Emerging Markets Index slipped 0.4 percent for a third day of declines that brought its weekly drop to 1.6 percent.

Gold extended a 1.7 percent drop on Thursday, sliding to a six-week low on mounting speculation that the Fed is moving closer to raising rates. Futures for June delivery fell to $1,174.50 an ounce. Earlier, the price touched $1,168.40, the lowest for a most-active contract since March 20. The metal headed for the third straight weekly decline, the longest slump since late February.

Oil declined from a four-month high in New York as Iraq raised monthly crude exports to the most in three decades. West Texas Intermediate for June delivery declined to $59.15 a barrel in New York. The contract rose to as much as $59.90 earlier, the highest since Dec. 11. Prices jumped 25 percent last month.

Brent for June settlement fell 0.5 percent to $66.46 a barrel in London. Prices rose 21 percent in April, also the most since 2009.

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