Dow Climbs to Record on Wal-Mart as Oil Sinks; Bonds Rise

U.S. stocks rose, as Wal-Mart Stores Inc. drove the Dow Jones Industrial Average to a record, offsetting declines in small-cap and energy shares. Crude oil extended losses to the lowest level in four years on concern OPEC won’t act to ease a global glut, while Treasuries climbed.

The Dow gained 0.2 percent to an all-time high of 17,652.79 by 4 p.m. in New York, as Wal-Mart jumped 4.7 percent after earnings topped analysts’ estimates. The Standard & Poor’s 500 Index added 0.1 percent after fluctuating during the session, while the Russell 2000 Index of smaller companies dropped 0.9 percent. U.S. oil and Brent slid more than 3 percent. Ten-year Treasury yields declined two basis points to 2.35 percent. The ruble weakened against most of its peers as Europe and U.S. weighed further sanctions against Russia.

Wal-Mart, the world’s largest retailer, posted better-than-projected third-quarter results after paying less in taxes and amid growth in same-store sales. Warren Buffett’s Berkshire Hathaway Inc. agreed to buy the Duracell battery business from Procter & Gamble Co., while Hasbro Inc. was said to be in talks to acquire DreamWorks Animation SKG Inc. Saudi Arabia dismissed talk of an OPEC price war, while inventories at the delivery point for U.S. oil rose to the highest since May.

“The market is just churning right now, looking for an indication of which direction the future is going to take,” Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors Inc., said by phone. His firm oversees $1.8 billion. “There is no catalyst to get investors excited or to instill additional fear.”

Jobless Claims

About $3.4 trillion has been added to the value of global stocks in the past four weeks, data compiled by Bloomberg show. Better-than-expected company earnings and economic data has boosted optimism that the U.S. economy will weather a global slowdown even as the Federal Reserve winds down its bond-buying program. The S&P 500 has gained 9.5 percent from a six-month low reached in October.

Claims for unemployment benefits in the U.S. increased by 12,000 to 290,000 in the week ended Nov. 8, the highest tally since Sept. 20, according to Labor Department data released today. The median forecast of 53 economists surveyed by Bloomberg called for 280,000 claims.

Wal-Mart gained 4.7 percent after reporting third-quarter earnings per share that exceeded analyst forecasts. United Parcel Service Inc. dropped 0.8 percent after forecasting earnings for 2015 that fell short of some analysts’ estimates.

M&A Activity

Of the companies in the S&P 500 that have reported this earnings season, 80 percent have beaten estimates for profit and 60 percent have topped sales projections, data compiled by Bloomberg show.

Among mergers and acquisitions, Berkshire agreed to buy Duracell from Procter & Gamble for $4.7 billion in stock. DreamWorks Animation SKG Inc. jumped 14 percent after people briefed on the matter said Hasbro Inc. is in talks to acquire the film studio.

Exxon Mobil Corp. paced losses in energy shares amid the slide in oil prices. The S&P 500 energy sub-index fell 1.3 percent, and is down 15 percent from a record reached in June. Exxon has ceded its title as the world’s second-largest company to Microsoft Corp. after the five-month oil rout cut almost $50 billion from its market value.

Exxon slipped 0.8 percent, reducing its market capitalization to $401 billion. Microsoft climbed 1.7 percent, pushing its overall value to about $409 billion.

Oil Selloff

WTI crude tumbled 3.9 percent to $74.21 a barrel, its lowest settlement since Sept. 21, 2010, while Brent oil for December delivery sank 3.1 percent to $77.92 per barrel, also the lowest level since September 2010.

Oil has collapsed into a bear market as leading members of the Organization of Petroleum Exporting Countries resist calls to cut production, instead reducing export prices to the U.S., where output has climbed to the highest level in more than three decades.

Saudi Arabia is committed to a stable market and concern of a price war within OPEC “has no basis in reality,” Oil Minister Ali Al-Naimi said yesterday in Acapulco, Mexico. Saudi discounts offered to Asian customers in October triggered speculation that OPEC’s largest member was seeking to preserve market share. The group is scheduled to meet Nov. 27 in Vienna.

Crude supplies at Cushing, Oklahoma -- the delivery point for WTI oil -- climbed 1.7 million barrels to 22.5 million last week, the Energy Information Administration said today. Overall U.S. crude stockpiles decreased 1.74 million barrels, according to the EIA, the U.S. Energy Department’s statistical arm.

Europe Split

The ruble weakened 1.9 percent to 46.82 per dollar after gaining 0.8 percent yesterday, while Russia’s Micex Index slid 1.4 percent.

European leaders remained split over whether to levy deeper sanctions against Russia for backing a rebellion that’s killed thousands of people in Ukraine. Russia must stop violating a Sept. 5 cease-fire agreement signed in Minsk, Belarus, Samantha Power, U.S. Ambassador to the United Nations, told journalists today.

Ukraine’s foreign minister said his country is prepared to defend itself after NATO warned Russia was sending combat troops across its border. Russian President Vladimir Putin denies military involvement in the area.

The hryvnia gained 2 percent against the dollar, trimming this year’s slide in the Ukrainian currency to 47 percent, still the biggest depreciation among currencies worldwide.

Pound Declines

The pound extended losses into a second day after Ben Broadbent, the Bank of England’s deputy governor for monetary policy said on BBC Radio 5 Live that disinflationary trends in the U.K. economy “will remain in place for a while” and a report showed evidence of a property-market slowdown. The currency slumped 0.9 percent versus the greenback yesterday, when the BOE cut its growth forecasts for the U.K.

The dollar slipped 0.3 percent to $1.2475 per euro after New York Fed President William C. Dudley urged investors to be patient on the timing of U.S. interest-rate increases.

“Several of the various ‘headwinds’ that have impeded U.S. economic activity in recent years have subsided,” Dudley said today in a speech at the Central Bank of the United Arab Emirates in Abu Dhabi. “Although patience is appropriate, if all goes well, I anticipate that we will begin to raise short-term rates sometime next year.”

The yen weakened, losing 0.2 percent to the dollar, amid prospects Prime Minister Shinzo Abe will call an early election.

Treasuries advanced for the first time in three days, with yields on 30-year Treasury notes falling three basis points, or 0.03 percentage point, to 3.08 percent.

China Banks

The Hang Seng China Enterprises Index of mainland Chinese stocks listed in Hong Kong added 0.7 percent on a report that the central bank will inject cash into smaller banks. The Shanghai Composite Index slipped 0.4 percent, falling from a three-year high.

The People’s Bank of China is gauging demand among city commercial banks for funds to support lending to small enterprises, according to an official with knowledge of the matter. The move comes as data today showed China’s industrial output growth slowed in October and fixed-asset investment trailed estimates.

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