- Oil rises above $33 after Russia moots meeting with OPEC
- Dollar weaker against euro after Fed, durable-goods data
U.S. stocks climbed as a rally in oil bolstered energy shares and investors digested earnings from Facebook Inc. to Under Armour Inc. Developing-nation equities rose on speculation the Federal Reserve will hold off on more policy tightening anytime soon.
The Standard & Poor’s 500 Index closed higher for only the second time this week after fluctuating earlier during what was the busiest day of the earnings season. Amazon.com Inc. tumbled in extended trade after its earnings trailed estimates. The MSCI Emerging Markets Index jumped following the dovish comments from the Fed in a statement Wednesday. West Texas Intermediate capped for a three-day advance, helping boost currencies of commodity-linked nations. The dollar extended its longest losing streak in four months versus the euro after a report showed U.S. durable-goods orders slumped.
Speculation that central banks around the world will intervene to steady financial markets has helped shore up investor confidence over the past week. The Fed’s first statement since its December rate hike noted officials were “closely monitoring” developments from China to Europe for any adverse impact on the economy. The U.S. earnings season is also in full swing and investors are monitoring results to make sure companies are strong enough to counter concerns ranging from China’s slowdown to flagging global growth.
“I think the Fed statement yesterday got everybody used to the fact that the Fed is probably in pause mode,” said John Canally, chief economic strategist at LPL Financial Corp. in Boston. “Oil is going to dictate where markets go, but there’s still a lingering fear that there’s some great unknown out there with regard to China.”
The S&P 500 added 0.6 percent as of 4 p.m. in New York. Energy and technology stocks led gains as Facebook surged 16 percent after reporting record sales. Health-care stocks were the only decliners among 10 major groups, as Abbott Laboratories and Celgene Corp. tumbled after posting disappointing results. EBay Inc. saw its biggest decline in more than seven years after reporting sales that fell short of analysts’ estimates.
“Biotechs are running counter to the good day that oil is having and energy stocks are having,” said Tim Ghriskey, who helps oversee $1.5 billion as managing director and chief investment officer at Solaris Asset Management in New York. “The health-care sector is just taking it on the chin today and I think that’s a valuation issue.”
Amazon sank 12 percent in extended trading after the online retailer below-estimate sales and profit for the holiday quarter as U.S. markets closed. Visa Inc. added 2.4 percent in post-market trading on a 24 percent increase in fiscal first-quarter profit.
The Stoxx Europe 600 Index fell 1.6 percent amid worse-than-estimated earnings from companies including Roche Holding AG and Hennes & Mauritz AB. Banks were among the worst performers, with Deutsche Bank AG sliding 5.4 percent to its lowest level in almost seven years, after posting its first annual loss since 2008.
In Asia, most index futures foreshadowed gains after markets diverged on Thursday. The MSCI Asia Pacific Index was little changed as Japanese stocks fell, while those in Australia, South Korea and Hong Kong climbed.
The MSCI Emerging Markets Index climbed 0.9 percent, rising for a second day to trim this month’s slide to 9.1 percent. Benchmark stock measures in Poland and South Africa rose at least 1.3 percent.
“The Fed sounded relatively dovish watching global developments,” said Bernd Berg, an emerging markets strategist in London at Societe Generale SA. “A March Fed rate hike looks increasingly unlikely now. I think we are now entering a risk-on phase and oil-related currencies will post a sizable rally.”
The Bloomberg GCC 200 Index of Gulf stocks advanced 2.8 percent, as equity gauges in Saudi Arabia and Dubai jumped more than 3.2 percent.
The Shanghai Composite Index slid 2.9 percent to 2,655.66, capping a 9.6 percent retreat over three days, as concern China’s weakening economy will lead to a drop in corporate profits overshadowed the biggest cash injection into the financial markets in three years from Chinese regulators.
West Texas Intermediate crude futures climbed 2.9 percent to $33.22 a barrel, rising for a third day to reach its highest close since Jan. 7. Brent gained 2.4 percent to $33.89.
Oil extended its rally amid reports Russian Energy Minister Alexander Novak was willing to meet with OPEC next month to coordinate policy on crude production. Four representatives from the Organization of Petroleum Exporting Countries said they hadn’t heard of any plan for talks, while one Gulf member said the group’s de-facto leader Saudi Arabia had no proposal to trim production by 5 percent, as reported by Russian news agency Interfax, citing Novak.
WTI is on track for a third straight monthly drop, falling 8.9 percent despite gains over the past two weeks.
Gold fell 0.9 percent to $1,114.48 an ounce, snapping three days of gains. Most industrial metals retreated, with zinc falling 0.8 percent and copper down 1.3 percent in London.
Treasuries fluctuated Thursday as crude rebounded and data showed orders for U.S. business equipment fell in December. Yields on 10-year notes fell two basis point to 1.98 percent.
German 10-year government bonds rose for a fourth day as a report showed consumer prices in Europe’s biggest economy increased in January on an annual basis, but dropped month-on-month. With oil and stock markets fluctuating, potential deflation remains an investor concern. A gauge of inflation for the euro area fell Wednesday to its lowest level in about a year, keeping prospects alive of more easing from the European Central Bank.
The ECB sparked a risk-asset rally a week ago when it indicated stimulus could be bolstered as soon as March to counter rising market volatility.
Ten-year Japanese government debt snapped a three-day gain, with yields up two basis points, or 0.02 percentage point, to 0.23 percent.
A Bloomberg gauge of 20 emerging-market currencies rose 0.9 percent as Colombia’s peso, the South African rand and Russia’s ruble all strengthened at least 1.4 percent versus the dollar.
The pound advanced versus most of its major peers after a report showed economic growth in the U.K. accelerated in the fourth quarter. The pound rose 0.9 percent to $1.4355, after falling to $1.4080 on Jan. 21, its lowest level since March 2009.
The greenback weakened versus all of its Group-of-10 counterparts, except the yen, falling 0.4 percent to $1.0939 per euro. The dollar’s four-day loss against the common European currency is its longest since September.