S&P 500 Rises to Record, Metals Gain Amid on Housing DataJeremy Herron and Callie Bost
U.S. stocks rose, with the Standard & Poor’s 500 Index closing above 1,900 for the first time, after an increase in home purchases boosted confidence in the economy. The euro weakened to a three-month low and oil advanced, while copper led industrial metals higher.
The S&P 500 added 0.4 percent to 1,900.53 at 4 p.m. in New York, capping its first weekly advance in three. The Nasdaq Composite Index jumped 0.8 percent to erase its loss for 2014. Trading volume was near the lowest level of the year as investors headed into a three-day weekend. Treasuries rose for the first time in three days, while Europe’s shared currency depreciated 0.2 percent to $1.3631, after touching a three-month low. Copper rose 0.7 percent and aluminum climbed to a three-week high.
Purchases of new U.S. homes rose in April for the first time in three months as buyers took advantage of falling mortgage rates. Business sentiment in Germany, the euro area’s largest economy, declined more than analysts forecast, fueling speculation the European Central Bank will boost stimulus. Russian President Vladimir Putin said his government will work with the next president of Ukraine, even though the election won’t meet international standards.
“The equity market is on autopilot with an upward bias,” Terry Sandven, chief equity strategist at Minneapolis-based U.S. Bank Wealth Management, which oversees $120 billion, said by phone. “Housing adds to consumer confidence, net worth and consumer spending. That is positive for sentiment and should be a positive for the broader markets.”
The S&P 500 rose three straight days to cap a 1.2 percent advance this week. The yield on the 10-year Treasury note slid three basis points to 2.53 percent. The bond markets closed at 2 p.m. in New York and will, along with U.S. equities markets, remain shut Monday for Memorial Day.
A Commerce Department report showed home sales increased 6.4 percent last month, the most since October. Declining borrowing costs and greater employment opportunities raise the prospects for an industry that has struggled to build on gains made earlier last year.
Central bank officials have been gauging the strength of the economy to help determine the pace of cuts to stimulus efforts that have sent the S&P 500 up as much as 180 percent from a 12-year low in 2009.
The Russell 2000 Index of smaller companies added 1.1 percent today and rallied 2.1 percent this week. The index tumbled as much as 9.3 percent from a record on March 4 amid concern that prices have outrun earnings. It is down 3.2 percent this year. Small-caps and Internet shares were among the biggest victims of the market retreat as investors fled last year’s best-performing equities.
Among stocks moving today, GameStop Corp. rose 4.2 percent after reporting first-quarter earnings that topped analysts’ estimates. Hewlett-Packard Co. surged 6.1 percent after the company announced plans to cut as many as 16,000 additional jobs. Aeropostale Inc. tumbled 25 percent after forecasting a bigger loss than analysts had estimated.
About 75 percent of S&P 500 companies that have reported results this season beat analysts’ estimates for profit, while 53 percent exceeded sales projections, data compiled by Bloomberg show.
The U.S. stock market is trading in the tightest range in eight years, according to data from Bespoke Investment Group LLC. In the last three months, the difference between the S&P 500’s intraday high and low has been less than 5 percent, the Harrison, New York-based research group said in a report yesterday.
The Bloomberg Dollar Spot Index rose 0.1 percent for a fourth day of gains. The stronger greenback sent gold lower as demand for a haven waned. The metal settled 0.3 percent lower at $1,291.90 an ounce in New York. Silver retreated 0.5 percent to $19.418 an ounce.
Copper rose to $6,918.75 a metric ton. Construction generates about 40 percent of demand for the metal, according to the Copper Development Association. Aluminum advanced as much as 1.6 percent to $1,824 a ton, the highest since April 29. It closed higher by 1 percent at $1,814.50.
West Texas Intermediate crude advanced 0.6 percent to $104.39, the highest in five weeks with futures headed for a third weekly gain, as violence flared in Ukraine. An attack yesterday by pro-Russian rebels left 16 servicemen dead, the highest death toll for government forces since the separatist conflict in the eastern part of the country began in March.
In Russia, the ruble strengthened 0.4 percent against the dollar. The Micex Index of stocks rebounded, adding 0.6 percent to close the week higher by 3.4 percent. The gauge’s fourth weekly advance is the longest run of gains since July.
The euro declined against most of its 16 major counterparts. The 18-nation currency slid beneath its 200-day moving average at $1.3638, according to data compiled by Bloomberg. The euro also declined as concern grew euro-skeptic parties will gain ground in elections this weekend for the European Parliament.
The business climate index from Germany’s Ifo institute, based on a survey of 7,000 executives, fell to 110.4 in May from 111.2 the prior month. Economists predicted a drop to 110.9, according to the median of 38 estimates in a Bloomberg News survey.
“The Ifo survey is the trigger for more euro weakness today,” said John Hardy, the head of foreign-exchange strategy at Saxo Bank A/S in Copenhagen. “The worry now is that momentum is waning in the core and that strengthens the case for the ECB to move in June. There is some nervousness around the European election results too.”
The yield on 10-year Spanish bonds dropped seven basis points to 2.99 percent and Italy’s rate slid nine basis points to 3.16 percent.
Following a rally in euro-area bond markets that swept yields from Ireland to Italy to record lows this month, Standard & Poor’s added its endorsement, raising Spain’s rating one level to BBB. Benchmark German 10-year yields were little changed at 1.41 percent. percent.
Europe’s Stoxx 600 Index added 0.2 percent. The gauge has gained 0.8 percent in the past five days, capping a sixth week of gains, the most since November.
Thailand’s SET Index fell 0.6 percent while the baht was little changed against the dollar, paring earlier gains. Thailand’s army staged its 12th coup in eight decades as the army chief said he was seizing control to restore peace.
Schools were shut, international television stations were off air and channels broadcast military logos and patriotic music, a day after the military seized control following a six-month political stalemate.
After the last coup was announced on Sept. 19, 2006, the baht dropped 1.4 percent the next day before rebounding 1 percent in the following trading session.