S&P 500 Extends Record, Treasuries Gain Amid Uneven Economy Data

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U.S. stocks rose to record levels and Treasuries gained a second day as mixed economic data added to speculation the Federal Reserve won’t rush to raise interest rates. Crude oil rallied, while the dollar weakened.

The Standard & Poor’s 500 Index advanced 0.3 percent to a record 2,130.82 by 4 p.m. in New York, while the Nasdaq Composite Index ended two points below its all-time closing high. Yields on 10-year Treasury notes fell six basis points to 2.19 percent. The Bloomberg Dollar Spot Index lost 0.1 percent after rallying 1.9 percent the previous three days. The Stoxx Europe 600 Index gained 0.4 percent. U.S. oil rose 3 percent.

Purchases of previously owned homes unexpectedly fell in April, a sign the industry’s recovery remains uneven, while U.S. jobless claims over the past four weeks dropped to a 15-year low. Minutes of the Fed’s April meeting released Wednesday indicated officials probably won’t raise rates in June, though the option of tightening this year remains open.

“Investors in the U.S. are sitting on all-time highs,” said Christian Gattiker, head of research at Julius Baer Group Ltd. in Zurich. “The June rate hike was off the table a long time ago, but there’s some relief the Fed acknowledged this.”

Many Fed officials didn’t expect to raise rates at their June meeting even as they conclude last month that a slowdown in the first quarter was unlikely to persist, the minutes showed. Fed Chair Janet Yellen is due to give a speech Friday on the economic outlook.

Transport Stocks

The S&P 500 ended the New York session little changed in the prior two days after closing Monday at a record. The Dow Jones Industrial Average was little changed Thursday after retreating from an all-time high the day before.

The Dow Jones Transportation Average jumped 0.6 percent to rebound from a 2 percent rout Wednesday after airlines tumbled. The transportation gauge has lost 6.4 percent this year, compared with the broader Dow’s 2.6 percent gain.

“Transportation stocks are more reflective of how our economy is starting to show significant cracks,” said Yousef Abbasi, the global market strategist at JonesTrading Institutional Services LLC in New York. “The market making news highs while TRAN is making new lows is never a good sign,” he said, referring to the gauge’s acronym. “I don’t want to call it a bad omen, but it’s something to consider.”

While traders are almost ruling out the probability of a June rate hike, the odds of an increase in December were at 54 percent Thursday, according to CME Group Inc. calculations of Fed funds futures prices.

M&A Boost

Treasuries maturing in 10 years or longer bounced back Thursday after losing 4.99 percent this month, according to Bloomberg U.S. Treasury Bond Index data.

Dollar bulls had been enjoying their best week since March, as the greenback rallied from an almost four-month low reached last week. The dollar retreated Thursday versus 13 of its 16 major peers, weakening 0.2 percent to $1.1112 per euro.

Deals helped boost equities, with Omnicare Inc. rising 1.7 percent after CVS Health Corp., the biggest U.S. retailer of prescription drugs, agreed to acquire nursing-home pharmacy for a total enterprise value of $12.7 billion.

Earnings were mixed. Best Buy Co. jumped 3.9 percent after posting profit that topped estimates. Salesforce.com Inc. climbed on a higher revenue forecast. NetApp Inc. sank 10 percent, the most in three years, after revenue and profit that missed estimates.

Crude, Coffee

Energy stocks in the S&P 500 climbed 0.8 percent. Bank of America Corp. analysts led by Savita Subramanian recommended in a note today that investors increase their allocations to the group to more than their weighting in the S&P 500, citing a better outlook for commodity prices.

Oil rose for a second day after data showed U.S. crude stockpiles shrank, indicating the supply glut may be easing. West Texas Intermediate crude for July delivery climbed to $60.72 a barrel.

Gold fell to a one-week low, with futures for June delivery slipping 0.4 percent to settle at $1,204.10 an ounce. The metal touched $1,200.80, the lowest level since May 13.

Coffee futures slid to their lowest level in more than a year amid signs global supplies are increasing and crop prospects in Brazil, the world’s biggest producer, are improving. Arabica coffee for July delivery slumped 5.6 percent to settle at $1.2845 a pound, after touching $1.2785, the lowest since Feb. 3, 2014. The drop was the largest for a most-active contract since March 3, and extended a rout in the past year to 29 percent.

The Bloomberg Commodity Index added 0.8 percent, for a second day of gains amid crude’s advance.