Stocks, Commodities Pare Monthly Rallies Before Jobs Data

U.S. stocks and commodities fell, trimming monthly rallies, as a jump in jobless claims spurred concern about the labor market before tomorrow’s employment data. Treasuries gained while the euro capped a sixth straight monthly gain, its longest streak in a decade.

The Standard & Poor’s 500 Index fell 0.3 percent to 1,498.11 at 4 p.m. in New York, trimming its best January rally since 1997. The Stoxx Europe 600 Index closed down 0.5 percent. The S&P GSCI Index of commodities slipped 0.1 percent from its highest level since September after earlier losing as much as 0.6 percent. Ten-year Treasury yields fell one basis point to 1.98 percent. The euro traded at $1.3576, near a 14-month high.

Data tomorrow is forecast by economists to show payrolls increased by 165,000 in January for a 28th straight month of growth, yet not enough to reduce the 7.8 percent unemployment rate. Early losses in stocks and commodities today came after the Labor Department said jobless claims grew by 38,000 to 368,000 last week, adding to concern about the economy a day after data showed gross-domestic product unexpectedly shrank last quarter.

“It’s more about fundamentals and the global picture than the jobs report,” Brad Thompson, managing director and fund manager at Frost Investment Advisors, based in San Antonio, Texas, said in a phone interview. “As long as the jobs report doesn’t disappoint. I think we can ride through that.”

$2.6 Trillion

About $2.6 trillion has been added to the value of equities worldwide this month as earnings from companies including General Electric Co. and Goldman Sachs Group Inc. beat estimates and U.S. lawmakers forged a deal to avert the so-called fiscal cliff of automatic spending cuts and tax increases that threatened to plunge the economy back into recession.

Including dividends, the S&P 500 rallied 5.2 percent this month for its best January return since 1997. The benchmark gauge for American equities retreated yesterday from a five-year high, and is trading less than 4.5 percent below its 2007 record. The MSCI All-Country World Index has increased 4.5 percent in its best January since 1994.

“Over the last six months, we’ve had a big re-rating of stocks, but we haven’t had the earnings power coming through,” Toby Nangle, head of multi-asset allocation at Threadneedle Asset Management, told Bloomberg Television. “Earnings are going to be critical. We need to get delivery on what we’ve already paid for.”

Earnings Season

Among U.S. stocks moving today, United Parcel Service Inc. slid 2.4 percent on a profit forecast that trailed estimates as a weak global economy hurts demand for shipping. Dow Chemical Co. slid 7 percent after earnings missed forecasts as sales fell in Europe. Qualcomm Inc. rose 3.9 percent and JDS Uniphase Corp. rallied 17 percent amid better-than-anticipated earnings.

Earnings have beaten the average analyst estimate at about 75 percent of the 232 companies in the S&P 500 that released results so far in the quarter exceeded profit projections, according to data compiled by Bloomberg. Sales have topped estimates at 66 percent, the data show.

The gain in initial jobless claims reported today was the most since Nov. 10 and topped the 350,000 median forecast in a survey of economists. Data tomorrow may show employers added 165,000 workers this month, according to the median of economists’ projections. The unemployment rate is forecast to have held at 7.8 percent.

Economic Data

Another report showed personal incomes rose 2.6 percent last month, the biggest gain since December 2004 when Microsoft Corp. paid a special divided. In addition to improving wages and salaries, some companies paid dividends and employee bonuses earlier than usual before tax rates went up this year, signaling the surge in incomes will be reversed in the first three months of 2013.

Business activity in the U.S. expanded more than forecast in January, with the MNI Chicago Report’s business barometer rising to 55.6 this month, the highest since April, after 50 in December. A reading of 50 is the dividing line between expansion and contraction. The median forecast of 48 economists was 50.5.

Silver, wheat and gold lost at least 1 percent for the biggest declines among commodities. Gasoline slipped 0.4 percent to $3.0258 a gallon, while crude oil fell 0.5 percent to $97.49 a barrel. Sixteen of the 24 commodities tracked by the S&P GSCI declined, while cocoa and heating oil helped lead gains.

Gold futures fell the most in almost four weeks, losing 1.2 percent to $1,662 an ounce, as concern about U.S. inflation waned after government data showed an index of prices tied to spending patterns was unchanged in December from November.

The S&P GSCI capped a 4.5 percent gain for January, its biggest advance since August.

European Markets

Two stocks fell for each that gained in the Stoxx 600, with the volume of shares changing hands on the gauge 24 percent higher than the 30-day average, according to data compiled by Bloomberg.

AstraZeneca Plc tumbled 3.2 percent, the most in nine months, after the U.K. drugmaker forecast profit this year will decline. Royal Dutch Shell Plc dropped 2.7 percent as fourth-quarter profit missed analyst estimates on weaker North American fuel prices. Ericsson AB, the world’s largest maker of wireless networks, jumped 7.6 percent after reporting a bigger gain in sales than analysts projected.

Banco Santander SA slid 3.5 percent as Spain’s biggest lender posted fourth-quarter profit that missed analyst estimates. The shares were the biggest drag on Spain’s IBEX 35 Index, which slid 2.4 percent to lead losses in 94 national benchmark indexes tracked by Bloomberg. After Spain’s market closed, regulators lifted a ban on short-selling stocks.

Beating Estimates

In western Europe, 57 percent of companies reporting results have beaten analysts’ profit estimates, according to data compiled by Bloomberg. Some 63 percent have exceeded revenue projections.

Germany’s 10-year bund yield fell three basis points to 1.68 percent after reaching 1.73 percent yesterday, the highest since Sept. 17. Rates on French and British 10-year securities also declined, while Greek and Portugal yields rose.

The MSCI Emerging Markets Index was little changed, capping a 1.2 percent monthly gain. The Shanghai Composite Index added 0.1 percent to the highest since May 29. India’s Sensex gauge lost 0.6 percent, Brazil’s Bovespa index rallied 0.7 percent and Russia’s Micex Index added 0.2 percent.

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