U.S. Stocks Fall as S&P 500 Slips From Record; Gold GainsJeremy Herron and Joseph Ciolli
U.S. stocks fell from near records, with the Standard & Poor’s 500 Index paring a seventh straight December gain, while Treasuries rose and gold surged. European and emerging-market equities slipped with energy shares.
The S&P 500 slid 0.5 percent to 2,080.35 by 4 p.m. in New York, after closing yesterday at a record for the 53rd time in
2014. Utilities sank the most since June last year. The Stoxx Europe 600 Index lost 0.9 percent to extend its December retreat. The MSCI Emerging Markets Index fell 0.4 percent to push its loss this year to almost 5 percent. Ten-year Treasury yields touched their lowest level in a week as gold futures jumped 1.6 percent. Russia’s ruble strengthened 4 percent versus the dollar, trimming its worst annual slump since 1998.
The S&P 500 has risen 0.6 percent in December, bolstered by the fastest growth for the American economy in more than a decade. A report today showed U.S. consumer confidence increased less than estimated this month, while crude oil traded near the lowest level since 2009 in New York and London amid speculation U.S. oil inventories will hold at the highest level for the time of year in at least 30 years. Greek Prime Minister Antonis Samaras will request elections for Jan. 25, with the anti-austerity party Syriza leading in opinion polls.
“We could be seeing a little bit of profit-taking coming into year-end,” David Lafferty, who helps oversee $894 billion as the chief market strategist for Natixis Global Asset Management in Boston, said by phone. “Oil has been down a little bit, and you don’t have a lot going on other than that. Volume will tend to be very light through year-end, and we anticipate it being quiet.”
Trading in S&P 500 shares was 41 percent below the 30-day average, according to data compiled by Bloomberg.
The S&P 500 has gained 13 percent this year, while the Dow Jones Industrial Average is up 8.5 percent after climbing above 18,000 points for the first time last week. The Russell 2000 Index of small-cap stocks climbed to an all-time high Dec. 26 and the Nasdaq Composite Index reached its highest level since March 2000 that same day, closing about 5 percent below its record.
The gains in U.S. equities come amid declines elsewhere. While the S&P 500 is heading for a third straight annual advance, the MSCI All-Country World Index excluding the U.S. is down 6.2 percent for the year.
“The U.S. economy is doing well,” Herbert Perus, who helps oversee $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said in an interview. “Some stocks seem overpriced, but if you look deeper into the market you find a lot of good managed companies with good products that are still not expensive.”
The Conference Board’s U.S. consumer confidence index increased to 92.6 in December from 91 a month earlier, the New York-based private research group said today.
Yields on 10-year Treasury notes fell two basis points, or
0.02 percentage point, to 2.188 percent in New York, after earlier touching 2.1651 percent, the lowest rate since Dec. 23. Investors sought out the relative safety of U.S. government securities amid the decline in stocks.
Gold futures for February delivery climbed to $1,200.40 an ounce, after touching $1,210.90, the highest intraday price since Dec. 18. Futures are down 0.2 percent this year after sliding 1.1 percent yesterday as the strengthening dollar eroded the precious metal’s appeal as a store of value.
Europe’s benchmark equities index headed for the first December decline since 2008 and emerging-market shares slid toward a second yearly drop as energy shares continued their retreat. Total SA and Royal Dutch Shell Plc lost at least 2.2 percent, while Russia’s OAO Tatneft, Kuala Lumpur-based oil and gas services provider Bumi Armada Bhd and China Oilfield Services Ltd. led energy-stock declines in MSCI’s developing nations gauge.
The measure of emerging-market energy shares is poised for its steepest annual drop since 2008, falling 28 percent amid crude oil’s descent into a bear market.
West Texas Intermediate and Brent crude prices fluctuated near their lowest settlement levels since 2009 after erasing earlier declines. WTI rose 1 percent to $54.12 a barrel by the end of trading, while Brent climbed to $57.90 per barrel in London. The U.S. benchmark is down more than 45 percent this year as the largest U.S. oil output in about 30 years collides with slowing global demand and OPEC’s refusal to reduce production levels.
Italy’s 10-year bond yields dropped 10 basis points to 1.88 percent. The government sold 2.996 billion euros ($3.6 billion) in 2.5 percent 10-year bonds in an auction today at a record-low average yield of 1.89 percent, the Bank of Italy said. The auction caps the best year for European government bonds since 1995 with a rally that has sent borrowing costs from Germany to Ireland to all-time lows.
Three-year yields in Greece held above 12 percent after the prospect of early elections was confirmed this week. Samaras failed to get his candidate for president, Stavros Dimas, confirmed by the requisite supermajority of 180 lawmakers, necessitating a fresh vote.
Credit-default swaps insuring $10 million of Greek debt for five years were quoted at $3.68 million upfront and $500,000 annually, signaling a 64 percent probability of default, according to CMA.
The ruble climbed to 56 per dollar on speculation Russian policy makers were stepping in to shore up the currency on the final Russian trading day of the year. The country’s Micex Index slid 2.5 percent, headed for its first annual decline in three years.
Rubber for June delivery rallied to 213.3 yen a kilogram on the Tokyo Commodity Exchange and palm oil climbed as much as 0.8 percent in Kuala Lumpur as flooding across Malaysia and parts of Thailand hurt supplies of both commodities and forecasters predicted more rain.