Nasdaq Nears Record, Treasuries Rise as Dollar WeakensJeremy Herron
Global stocks powered to their best weekly rally in nearly two years, sending two of the biggest equity benchmarks to the brink of records, on speculation the U.S. Federal Reserve will leave interest rates at zero past mid-year while European policy makers press stimulus. The dollar suffered its worst week since 2011 and oil rallied.
The Nasdaq Composite climbed 0.7 percent at 4 p.m. in New York, within 0.3 percent of its dot-com-era closing record, as Biogen Idec Inc. surged. The Stoxx Europe 600 rose 0.8 percent to a point from its March 2000 high. The Standard & Poor’s 500 Index jumped 0.9 percent, for its steepest weekly advance in six. The euro gained 1.6 percent to $1.0833, for the best week since October 2011. The yield on 10-year Treasury notes weakened four basis points to 1.93 percent. U.S. oil added 4 percent to $45.72 a barrel, the most since Feb. 12.
The MSCI All-Country World pushed its gain in the week to 3.3 percent, the most since July 2013. The Nasdaq Composite closed in on erasing losses from the Internet bubble, as Biogen Idec jumped to an all-time high on favorable Alzheimer drug results. Advances among miners and oil producers dragged the measure of European equities to within a hair of its 15-year-old record. Some futures and options on stocks and indexes expired today in a process known as quadruple witching.
“U.S. equities and especially international equities, of all the alternatives, still look like the healthiest alternative,” Tim Courtney, who helps oversee about $1.3 billion as chief investment officer of Exencial Wealth Advisors, said in a phone interview from Oklahoma City. “Until another viable alternative comes about --that doesn’t look like it’s going to happen until rates start to rise -- stocks should do well.”
The Nasdaq’s record close is 5,048.62, reached on March 10, 2000. Even with today’s advance it remains a long way from its intraday high of 5,132.52, reached the same day. It’s also below the second-highest intraday level, 5,078.86 on March 24, 2000.
The S&P 500 extended its weekly gain to 2.7 percent as Nike Inc. rallied on stronger-than-estimated earnings. It is 0.4 percent below its March 2 record. The operator of the S&P 500 rebalanced the index in a quarterly move to adjust member weightings.
Among stocks moving, Nike rose 3.7 percent as demand in North America and a bounce back in China offset the drag from a strong dollar on European sales. Biogen Idec jumped 9.8 percent after its experimental drug for Alzheimer’s slowed progression of the disease in a study. Tiffany & Co. retreated 3.9 percent after predicting currency headwinds will bring a sharp decline in net income.
In Europe, the Stoxx 600 rose 0.8 percent to within two points of its all-time high reached in 2000. The FTSE 100 Index jumped 0.9 percent to top 7,000 for the first time. Holcim Ltd. and Lafarge SA climbed after salvaging their $40 billion merger.
The dollar is retreating from its strongest level in at least a decade after the Federal Reserve cut its forecast for U.S. interest rates. The Bloomberg Dollar Spot Index dropped 1.5 percent.
The gauge, which tracks the greenback against 10 major peers, has retreated 2.2 percent this week, the most since October 2011. The euro headed for the first weekly advance since the second week of February. Only the Brazilian real fared worse than the dollar among major currencies this week.
“Most of the meat of the dollar bull-run is done,” David Bloom, global head of currency strategy at HSBC Holdings Plc in London, said in an interview on Bloomberg Television’s “On the Move” with Jonathan Ferro. “I think the Fed rate hike is in the price. The big motivation behind the dollar bull market has dried up.”
The Fed acknowledged that economic growth has moderated, indicating it is in no rush to raise interest rates. The central bank said it won’t tighten until it is “reasonably confident” inflation will return to its target and the labor market improves further.
Treasuries investors see the policy statement as a gift that keeps on giving, as U.S. 10-year note yields traded below 2 percent for a third day. The yield is down 16 basis points this week, the biggest drop since the week ended Jan. 9.
Greek bonds and stocks were higher after nearly four hours of talks in Brussels on Thursday between Greek Prime Minister Alexis Tsipras and EU leaders, who told Greece to submit a more concrete reform plan to euro-area authorities so that bailout talks can speed up.
Greece could win an infusion of bailout money as soon as next week, an EU official told reporters in Brussels. Leaders sought to revive talks at a meeting in Brussels by signaling they might soon be ready to release some funds so long as Greece fulfills its commitments.
“The most likely scenario is they’ll strike a deal,” said Charles St-Arnaud, senior economist at Nomura Securities International Inc., said by phone from London. “It’s pretty clear the risk of contagion or the lack of contagion to Spain or Portugal means financial market tends to pay less attention on Greece development.”
Greece’s ASE Index rose 2.9 percent to trim its weekly slide to 3.3 percent. The rate on the nation’s 10-year bonds slid 65 basis points to 11.35 percent.
Spain’s 10-year bond yield fell eight basis points to 1.18 percent. Italian bonds rose, pushing the 10-year yield six basis points lower to 1.20 percent. German 10-year yields slid one basis point to 0.18 percent.
West Texas Intermediate crude surged after 1.6 percent slide Thursday. Brent advanced to $55.32 a barrel in London.
Prices are down about 15 percent from this year’s peak in February as U.S. crude stockpiles expanded even as drillers idled a record number of rigs. The Organization of Petroleum Exporting Countries exceeded its production target in February for a ninth month. Iran may increase oil exports within months of reaching a deal on its nuclear program, according to U.S. and European officials.
Copper rose as Freeport-McMoRan Inc.’s Grasberg mine in Indonesia, the world’s second-biggest for the metal, remained shut for a fifth day as workers continued to block access.
Copper futures for May delivery jumped 3.7 percent to $2.7575 a pound in New York, heading for a 3.5 percent gain this week.
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