U.S. Stocks, Euro Gain Amid Debate on Cyprus BailoutWill Hadfield and Lu Wang
U.S. stocks gained and the euro rallied, paring weekly losses, as Cyprus’s lawmakers debated measures needed to get a bailout and companies including Nike Inc. and Tiffany & Co. posted better-than-estimated results.
The Standard & Poor’s 500 Index gained 0.7 percent at 4 p.m. in New York, trimming its second weekly loss of the year. The Stoxx Europe 600 Index fell less than 0.2 percent, while the MSCI Emerging Markets Index dropped to a three-month low. The euro appreciated versus all 16 major peers and Italian and Spanish 10-year bond yields fell, while 10-year Treasury note rates were little changed at 1.92 percent. Industrial metals led commodities higher.
Stocks and the euro extended gains after Averof Neofytou, deputy president of Cyprus’s ruling Disy party, said he believes lawmakers will reach a deal. The European Central Bank will withdraw funding from Cyprus’s lenders next week if the government and the euro area fail to agree on a deal. A report showed German business confidence unexpectedly declined this month, its first drop since October.
“At the company level, we’re still seeing good economic momentum, and that investors continue to have constructive view on the growth in the U.S., which should help the stock market,” James McDonald, chief investment strategist at Northern Trust Corp. in Chicago, said by phone. His firm manages $759 billion. This week, “the market is taking a pause after a very big run. The increased concern over Europe has led investors to take a few chips off the table.”
Among U.S. stocks moving today, Nike Inc. rallied 11 percent, its biggest gain since 2008, to a record $59.53 after the world’s largest sporting-goods company reported better-than-estimated earnings amid a rebound in profitability. Tiffany & Co. rose 1.9 percent after posting better-than-estimated quarterly profit amid increased demand in the Asia-Pacific region. Micron Technology Inc. jumped 11 percent, the most since 2011, after revenue exceeded estimates.
The S&P 500 slipped 0.2 percent in five days to cap its second weekly decline this year after uncertainty in Cyprus and a contraction in euro-area manufacturing reignited concern about the region’s debt crisis. The U.S. equity benchmark has still climbed 9.2 percent this year and rose within two points of its record set in 2007.
The Stoxx 600 trimmed a loss of as much as 0.4 percent to close down less than 0.2 percent. The gauge dropped 1.1 percent in five days, its worst weekly performance in four months.
Cyprus and the so-called troika, consisting of the European Commission, European Central Bank and International Monetary Fund, are in negotiations about winding down Laiki Bank and levying a modified fee on deposits at the remaining banks in a “package deal”, Welt reported, without saying where it got the information.
Marine Harvest ASA climbed 3 percent, the most since October, as a tightening fish supply and rising prices boost the company’s earnings outlook. MAN SE slid 2.6 percent, the most in five months, as Volkswagen AG plans to offer shareholders 80.89 euros per share to get full control of the truckmaker. Mulberry Group Plc, a British luxury-handbag maker, plunged 17 percent after saying full-year sales and profit will miss estimates.
BP Plc gained 1.9 percent after Europe’s second-largest oil producer said it will buy back $8 billion of shares from investors. AstraZeneca Plc added 3.3 percent as analysts responded positively when the drugmaker updated them on plans to revive its research and development division.
The euro climbed 0.8 percent to $1.2997 and strengthened 0.3 percent to 122.79 yen after earlier weakening as much as 0.8 percent.
U.K. natural gas for same-day delivery jumped as much as 54 percent to 150 pence a therm as imports from Belgium were interrupted amid predictions for unseasonably cold weather. The commodity pared its gain to 2.6 percent and traded at 100 pence.
The temperature in the U.K. will average 0.3 degrees Celsius (33 Fahrenheit) next week, MetraWeather data show. That’s lower than the 10-year average of 8.2 degrees.
The S&P GSCI gauge of 24 commodities added 0.3 percent, trimming its weekly decline to 0.9 percent. Nickel, oil and coffee led gains, while silver, corn and cotton lost at least 1 percent to lead declines. West Texas Intermediate gained 0.6 percent to $93.01 a barrel.
Gold futures for April delivery slipped 0.5 percent to $1,606.10 an ounce. Gold traders are becoming more bullish as concern mounts that a worsening of Europe’s debt crisis will spur demand for a protection of wealth at a time when nations from the U.S. to Japan are signaling more stimulus.
Sixteen analysts surveyed by Bloomberg expect prices to gain next week, while seven were bearish and two were neutral. That’s the highest proportion of bulls since March 8. Prices reached a three-week high of $1,617.07 an ounce this week as Cypriot lawmakers rejected an unprecedented levy on bank deposits that had been proposed in return for external aid.
The MSCI Emerging Markets Index fell 0.6 percent after PetroChina Co.’s profit trailed estimates and Thailand’s bourse said it may raise margin requirements. Thailand’s SET Index slid 3.3 percent, its biggest drop since October 2011, on concern the exchange may increase margin requirements on trading. The Thai index tumbled 7.5 percent this week to cap the steepest weekly drop since 2008
PetroChina, the nation’s largest energy producer, sank to the lowest since Dec. 3 in Hong Kong as net income fell 13 percent. OAO TNK-BP Holding slipped to a record low as OAO Rosneft said it won’t buy minority stakes.