S&P 500 Fails to Hold Record as Dollar Gains; Gas Slides

U.S. stocks ended the session little changed with the Standard & Poor’s 500 Index failing to hold above its record closing level for a third straight day. The dollar strengthened against most major peers while gold slid with silver and natural gas dropped a third day.

The S&P 500 closed flat at 1,845.16 by 4:20 p.m. in New York, erasing an earlier gain of as much as 0.4 percent. The dollar climbed the most against the euro this month and rallied against 14 of 16 major counterparts while the ruble and hryvnia slid on reports Russia ordered military exercises amid deepening tensions with Ukraine. Natural gas slid 4.7 percent amid forecasts for warmer weather in the eastern U.S. and gold futures sank the most in about a month. Silver lost 3.2 percent.

More than $2.1 trillion has been added to the value of stocks worldwide this month on speculation the global economy is strong enough to withstand cuts to U.S. stimulus. Purchases of new U.S. homes unexpectedly climbed in January to the highest level in more than five years. Ukraine’s currency slid to a record on a report the central bank halted support to preserve reserves after the president’s ouster. Forecasters are predicting a less-intense cold front across the U.S. East.

“We went through a snapback rally and got right back to the all-time highs,” James W. Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.5 billion from Boston, said by phone. “Nothing has changed from a month ago, so what’s the fuel to keep pushing stocks higher?”

The S&P 500 has climbed above its closing record of 1,848.38 every day this week, only to retreat from that level by the end of the session. The index also came within six points of the record each day last week.

Stimulus Outlook

The benchmark has rallied almost 6 percent from a low reached Feb. 3, reaching an intraday record of 1,858.71 Feb. 24, on prospects severe winter weather in the U.S. is the reason for weakness in data from housing to hiring. Federal Reserve Chair Janet Yellen said this month that the economy can weather cuts to the stimulatory bond buying program, adding that only a notable change to the economic outlook would prompt the central bank to slow the pace of tapering. Yellen testifies tomorrow on monetary policy before the U.S. Senate.

Three rounds of stimulus have helped push the S&P 500 up as much as 173 percent from a 12-year low reached in 2009.

Investors are returning to the U.S stock market after the worst selloff in seven months, adding almost 52 times more money to exchange-traded funds that own equities than bonds.

U.S. Movers

About $21 billion has been added to ETFs that buy and sell American shares in the past two weeks as stock prices recovered, according to data compiled by Bloomberg. The deposits compare with about $407 million sent to fixed income since Feb. 11.

Among stocks moving today, Chesapeake Energy Corp. slid 4.9 percent profit fell short of analysts’ estimates. First Solar Inc. tumbled 9.1 percent after posting a 58 percent drop in quarterly profit. Lowe’s Cos. and Abercrombie & Fitch Co. jumped more than 5 percent after announcing plans to buy back shares. Target Corp. gained 7 percent as profit topped projections.

An S&P index of homebuilder stocks climbed 3 percent, with all of its 11 members increasing. Purchases of new homes in the U.S. increased 9.6 percent to an annualized pace of 468,000 in January, exceeding the highest estimate among economists surveyed by Bloomberg and the most since July 2008, figures from the Commerce Department showed.

Treasury Auction

Treasuries rose after the U.S. auctioned $35 billion in five-year securities amid stronger-than average demand. Ten-year yields decreased four basis point to 2.67 percent.

The five-year notes sold yielded 1.530 percent, compared with a forecast of 1.539 percent in a Bloomberg survey of seven of the Federal Reserve’s 22 primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of debt offered, was 2.98, versus an average of 2.59 for the past 10 sales. Haven demand increased earlier amid tensions in Ukraine.

The Stoxx Europe 600 Index dropped 0.2 percent after closing yesterday at the highest level since January 2008. Two shares declined for each that gained in the gauge, with trading volumes 13 percent below the 30-day average, according to data compiled by Bloomberg.

Tesco Plc, the U.K.’s largest retailer, fell 2.7 percent. Utilities and retailers posted the biggest declines among 19 industry groups, losing at least 0.9 percent.

German Bunds

Credit Suisse Group AG fell 2.5 percent as an unidentified person familiar with the matter said U.S. regulators are investigating its accounting practices. Swiss Life Holding AG climbed 6 percent after the insurer boosted its dividend.

Yields on German 10-year bunds decreased three basis points, or 0.03 percentage point, to 1.62 percent even after the nation drew bids for 2.794 billion euros ($3.83 billion) of bonds maturing in 2046, less than the maximum 3 billion euros for sale. Last week, demand at an offering of securities due in a decade also missed the highest amount available.

The MSCI Emerging Markets Index rose less than 0.1 percent as declines of at least 1 percent in benchmark indexes for Poland, Turkey and the Czech Republic offset gains in Chile and China. The Hang Seng China Enterprises Index of mainland firms listed in Hong Kong advanced 0.7 percent and the Shanghai Composite Index climbed 0.4 percent. The yuan was little changed against the dollar after tumbling the most since 2010 yesterday.

Ruble, Hryvnia

The ruble slid 0.8 percent to 42.0406 against Bank Rossii’s target dollar-euro basket, the weakest level on a closing basis, by 6 p.m. in Moscow when the central bank stops its market operations. The Micex Index fell 0.6 percent to 1,469.51 in the Russian day. Yields on government bonds due February 2027 rose seven basis points to 8.38 percent.

President Vladimir Putin ordered military exercises amid concern parts of Ukraine will secede following the overthrow of the president and the installation of an interim government, the Interfax news agency reported.

The hryvnia weakened past 10 per dollar for the first time ever as CNBC reported the central bank adopted a flexible exchange rate, citing Sergiy Kruglik, the bank’s director of international affairs.

The North Atlantic Treaty Organization and the U.S. government made a plea for keeping post-revolutionary Ukraine united as tensions mounted in the Crimea and the Kremlin ordered a test of combat readiness of nearby Russian military units. Arseniy Yatsenyuk was named Ukraine’s new prime minister, giving him responsibility for steering the country clear of default after anti-government protests spurred the bloodiest events in the country’s post-World War II history.

Dollar Index

The Ugandan shilling slid 2.1 percent as donors threatened to cut aid to the African nation after President Yoweri Museveni signed a law that carries life sentences for homosexuality.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, rose 0.3 percent to 1,022.41, gaining the most since Jan. 30. The dollar climbed 0.4 percent to $1.3686 per euro and added 0.1 percent to 102.36 yen. The Japanese currency gained 0.3 percent to 140.109per euro.

Yields on 10-year Greek bonds fell 16 basis points to 7.13 percent, the lowest level since 2010, on speculation the country will reach an agreement with international creditors to ensure its bank recapitalization requirements are manageable. Central bank Governor George Provopoulos met with officials from the European Commission, International Monetary Fund and European Central Bank in Athens today.

Commodity Markets

The drop in U.S. natural gas brought the decline to 21 percent over three days. Forecasters including MDA Weather Services said frigid weather in the Midwest and East will ease starting March 7.

West Texas Intermediate oil climbed 0.7 percent to $102.59 a barrel as a report showed inventories dropped at Cushing, Oklahoma. Stockpiles at the futures’ delivery point slid 1.08 million barrels last week, the Energy Information Administration said. Supplies have shrunk since TransCanada Corp. said in January that it began using the southern leg of the Keystone XL pipeline to move oil to Texas from Cushing.

Gold futures fell 1.1 percent to $1,328 an ounce as the stronger dollar trimmed demand for the precious metal as an alternative investment.

Cattle futures rose 1.5 percent to a record as ranchers struggle to boost the U.S. herd from a 63-year low. Hogs climbed 0.4 percent, touching a 34-month high, after a virus that kills piglets spread, spurring concerns that meat supplies will shrink.

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