- Pipeline shutdown revives crude, driving commodities higher
- Nikkei futures signal gains with China to Korea shut Friday
Shares in the U.S. rose from a two-month low as Apple Inc. extended gains into a fourth day and a rebound in crude prices boosted energy stocks. The dollar retreated amid data showing the world’s biggest economy is on an uneven footing.
The S&P 500 Index climbed for the first time in three days as Apple pushed its gain this week past 12 percent. The U.S. benchmark bounced off its 100-day moving average before pushing higher as the level held for a fourth session. U.S. industrial production contracted more than forecast, while retail sales unexpectedly slid, sending the odds for a rate increase from the Federal Reserve next week below 20 percent. The dollar edged lower versus its major peers, buoying commodities from copper to sugar and cotton.
Equities continue to whipsaw investors this week after a rout last Friday jolted markets out of their two-month torpor, wiping almost $2 trillion off the value of stocks worldwide amid concern central banks are reluctant to boost stimulus even as the global economy sputters. Apple’s advance has buttressed U.S. equity indexes, with most of the major American wireless carriers saying demand for the new iPhone is higher than for previous models. The Bank of England kept asset purchases as is on Thursday, with attention now switching to the Fed and the Bank of Japan, both of which meet to review policy next week.
“Markets are being driven more by sentiment than logic right now,” said Peter Andersen, chief investment officer at Fiduciary Trust Co. in Boston, which has more than $11 billion of assets under supervision. “Everybody is very anxious to get clear trends in the market right now and investors have been reduced to looking at the data of the day and immediately factoring it into some calculus over whether the Fed will take action.”
The S&P 500 Index gained 1 percent to 2,147.26 as of 4 p.m. in New York, after a two-day drop of 1.5 percent left the index at its lowest point since July 7.
Apple rallied to its highest point since December amid optimism over the new iPhone’s prospects. Skyworks Solutions Inc. rose 6.4 percent and Intel Corp. gained 2.6 percent to lead computer chip stocks higher. Oil and gas companies rebounded from their worst two-day drop since June, while Wells Fargo & Co. fell 0.8 percent on reports the U.S. Justice Department is investigating its sales practices.
The Stoxx Europe 600 Index added 0.6 percent Thursday, halting a five-day slide. Siemens climbed 1.6 percent after Chief Executive Officer Joe Kaeser said Europe’s biggest engineering company may beat its earnings forecast for the fiscal year ending this month. Lenders rebounded after their worst three-day drop in two months, with those in Italy, Spain and Portugal among the biggest gainers.
Futures on Asian indexes signaled a rebound in the region, with markets in mainland China, Taiwan, Malaysia, South Korea and Hong Kong closed for holidays Friday. Futures on Japan’s Nikkei 225 Stock Average added 0.9 percent in Osaka, and 0.2 percent on the Chicago Mercantile Exchange, while those on Australia’s S&PP/ASX 200 Index were up 0.6 percent.
Yields on U.S. Treasuries due in a decade fell one basis point, or 0.01 percentage point, to 1.69 percent, extending the previous day’s three basis-point decline. Thirty-year Treasury yields rose one basis point to 2.46 percent after the spread between the two securities reached the widest in more than six weeks on Wednesday.
“There’s nothing in these numbers that tells us rates should be heading up,” Mark Kepner, managing director and equity trader at Themis Trading LLC in Chatham, New Jersey, said by phone, referring to Thursday’s U.S. economic data. “Yields are moving higher overseas and that means there is demand that’s going to come out of our bond market and maybe our stock market because of those investors that have been trying for yield that will leave. That’s more important than the data here.”
Securities with longer due dates have come under pressure after a selloff in Japan’s 30-year debt before next week’s BOJ meeting. Traders have been favoring shorter-dated notes, which tend to be influenced more by the prospect of policy changes from central banks, on confidence that the Fed will keep interest rates on hold, at least through next week’s policy meeting.
Yields rose across the euro area as Spain and France sold bonds. Germany’s benchmark 10-year bond yield increased three basis points to 0.05 percent. Yields on similar-maturity French bonds also rose three basis points, to 0.35 percent, and Spain’s were one basis point higher at 1.08 percent.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, slipped 0.1 percent for a second day of declines after the retail sales report damped speculation that the Fed will raise rates anytime soon. The U.S. currency weakened 0.3 percent to 102.10 yen.
The pound was little changed at $1.3239, even as the BOE indicated there’s still a chance of another rate cut this year as they assess the potential longer-term fallout from Britain’s decision to leave the European Union.
Crude climbed, fueled by gasoline’s biggest jump since May, after the restart of a pipeline carrying fuel to New York Harbor was delayed. Gasoline surged 5.1 percent after the projected restart of Colonial Pipeline’s Line 1, which can carry more than 1 million barrels a day of gasoline from the Gulf Coast to the eastern U.S., was pushed back to next week.
West Texas Intermediate crude for October delivery advanced or 0.8 percent to settle at $43.91 a barrel on the New York Mercantile Exchange. It slid almost 6 percent over the previous two days.
Copper futures touched their highest level in three weeks amid signs that demand may improve in China, the world’s biggest consumer of the metal. Aluminum, nickel, tin, zinc and lead all fell in London. Sugar and cotton futures rose at least 0.3 percent.