S&P 500 Halts 7-Day Rally While Gold Drops, Oil Advances

U.S. stocks fell, halting a seven-day rally in the Standard & Poor’s 500 Index, while gold slid the most since July and Treasuries erased early gains as investors weighed prospects for Federal Reserve stimulus. Oil climbed ahead of U.S.-Russian talks on Syria.

The S&P 500 lost 0.3 percent to 1,683.42 at 4 p.m. in New York, retreating from the highest level in almost a month. Gold for December delivery dropped 2.4 percent to $1,330.60 an ounce, while oil rose 1 percent. Treasury 10-year note yields were little changed at 2.91 percent, after dropping five basis points earlier, and German bund rates slid five basis points to 2.00 percent. Japan’s currency climbed 0.4 percent to 99.45 per dollar. The Australian dollar fell for the first time in a week and the nation’s bonds rallied after unemployment rose.

U.S. Secretary of State John Kerry will press for a timeline for Syria to surrender its chemical weapons, an American official said, as Russia’s leader urged the U.S. to steer clear of a Middle East military clash. The Federal Open Market Committee will probably taper its monthly bond buying by $10 billion at its Sept. 17-18 meeting to $75 billion, based on the median of 34 economists’ estimates collected by Bloomberg News.

“While the markets will continue to closely watch developments regarding Syria unfold, it shouldn’t be too surprising to see a modest pullback after the strong moves we’ve seen so far this month,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in an interview. His firm oversees $290 billion. “With data light over the next several sessions, potential headlines regarding Syria and the much anticipated FOMC meeting next week will garner much of the attention.”

Market Movers

The S&P 500 retreated after a seven-day rally pushed the index to a four-week high. The gauge is up 18 percent this year and had rallied 3.1 percent so far this month.

Commodity, financial and industrial shares led declines among the 10 main industry groups in the S&P 500 today, with only telephone shares advancing.

Barrick Gold Corp. dropped 5.5 percent as the precious metal slumped. Newmont Mining Corp., the largest U.S. gold producer, lost 4.2 percent. Lululemon Athletica Inc. tumbled 5.4 percent after cutting its earnings forecast. Pandora Media Inc. jumped 12 percent after naming digital-advertising veteran Brian McAndrews as its new chief executive officer.

Walt Disney Co. jumped 2.4 percent for the biggest gain in the Dow Jones Industrial Average on plans to buy back as much as $8 billion in stock.

Economic Data

A report today showed U.S. jobless claims declined last week to the lowest level since April 2006 as upgrades to computer systems in two states caused those employment agencies to report fewer applications. An agency spokesman said that the upgrades played a major role in the drop in claims.

Labor Department data last week showed payrolls in the U.S. climbed less than projected in August and gains for the prior two months were revised down.

About three shares fell for every two that rose in the Stoxx 600, with trading volume 6.4 percent greater than the 30-day average. Cie. Financiere Richemont SA, the world’s largest jewelry maker, fell 2.3 percent in Zurich after sales growth missed estimates. Home Retail Group Plc jumped 5.4 percent to a two-year high as the U.K. retailer reported second-quarter sales that exceeded projections. William Morrison Supermarkets Plc rallied 1.8 percent after saying it plans to cut capital expenditure.

Euro-area industrial output shrank more than economists forecast in July as manufacturers struggled to shake off the legacy of the region’s recession. Factory production fell 1.5 percent from June, the European Union’s statistics office said today. That’s more than the 0.3 percent contraction forecast by economists in a Bloomberg survey. Unemployment held at a record 12.1 percent in July.

Emerging Markets

The MSCI Emerging Markets Index dropped 0.2 percent after a six-day rally. The Shanghai Composite Index gained 0.6 percent after Premier Li Keqiang said he would accelerate financial reform. India’s S&P BSE Sensex decreased 1.1 percent, falling for the first time in six days, and Russia’s Micex Index slipped 0.3 percent.

The yen rose after Japan’s machinery orders stagnated in July and amid concern a sales-tax increase will hamper growth, boosting demand for the currency as a haven. The euro was down 0.1 percent at $1.3300 after earlier weakening as much as 0.4 percent.

Australia’s dollar fell against 15 of its 16 major counterparts after the statistics bureau said the number of people employed in the country fell 10,800 last month, following a decline of 11,400 in July. Economists predicted a 10,000 increase in August. Australia’s currency dropped 0.7 percent to 92.66 U.S. cents.

Kiwi, Commodities

New Zealand’s dollar rose for a fifth day, appreciating 0.8 percent to 81.43 U.S. cents, after the Reserve Bank said interest-rate increases “will likely be required next year” as the economy strengthens and inflation picks up.

The S&P GSCI Index of commodities increased 0.7 percent as gains in energy overshadowed declines in metals. Silver dropped 4.4 percent, the most in nine weeks, and copper declined 1.4 percent to a five-week low of $3.21 a pound.

Corn futures tumbled 1.3 percent to $4.6625 a bushel and wheat fell after the U.S. government said domestic and world inventories will be bigger than forecast. Wheat also slid.

Corn Supplies

U.S. corn reserves on Aug. 31, 2014, will total 1.855 billion bushels, up from 1.837 billion forecast in August, after farmers harvest a record crop this year, the Department of Agriculture said. Global inventories will jump 24 percent to a 12-year high. World wheat production will gain 8.2 percent to a record 708.9 million metric tons, boosting inventories 1.4 percent next year, the agency said.

West Texas Intermediate crude rose 1 percent to $108.60 a barrel in electronic trading on the New York Mercantile Exchange. Demand for crude from the Organization of Petroleum Exporting Countries will be 29.2 million barrels a day or 1.3 million a day lower than the group’s current production levels, the International Energy Agency said today in its monthly market report. Saudi Arabia’s Oil Minister Ali Al-Naimi said the kingdom will meet additional demand as geopolitical concerns dominate the market.

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