S&P 500 Nears Record as ECB Meeting Looms; Oil Snaps OPEC Rally

  • Policy meeting on Thursday seen delivering more stimulus
  • Dollar swings back to gains as yen weakens for second day

Is the S&P 500 a Little Bit Overbought?

U.S. stocks advanced, rising with emerging-market assets as investors speculated the European Central Bank will extend its monthly bond purchases to stoke growth in the region. Oil slipped from a 16-month high.

The S&P 500 Index neared its Nov. 25 record, buoyed by continued gains in financial shares and an advance in Verizon Communications Inc. on its agreement to sell a data-centers business. The dollar rallied in light currency trading, with the European Central Bank expected Thursday to extend its bond-buying program beyond March. Crude oil fell for the first time since OPEC agreed to cut production, and gold also declined. Treasuries were steady.

The stock rally sparked by speculation U.S. President-elect Donald Trump’s policies will stoke growth continued, driving the Dow Jones Industrial Average to a fresh record as prospects European monetary policy will remain accommodative also fueled gains. Italian bond investors moved on from the prime minister’s resignation in a sign that concerns the nation will move to leave the euro have faded. Questions over how successful major oil producers will be in their attempt to bolster prices weighed on crude prices Tuesday.

Stocks

  • The S&P 500 rose 0.3 percent to 2,212.23 as of 4 p.m. in New York, while the Dow Average gained another 0.2 percent. Verizon led a 1.5 percent advance in phone stocks, while Goldman Sachs Group Inc. added 1.2 percent in a second day of gains.
  • The Stoxx Europe 600 Index rose 1 percent, building on its 0.6 percent advance from Monday. German utilities RWE AG and EON SE climbed by at least 2 percent after a court ruled the pair must be compensated for the government’s shift away from nuclear energy.
  • Italy’s FTSE MIB Index jumped 2 percent, helped by gains in UniCredit SpA and Mediobanca SpA.
  • The MSCI Emerging Markets Index increased 1 percent.
  • Asian index futures signaled gains for Wednesday, with contracts on Japan’s Nikkei 225 Stock Average up 0.4 percent in Osaka.

Commodities

  • West Texas Intermediate crude slipped 1.7 percent to $50.93 a barrel, while Brent oil dropped 1.8 percent to $53.93, ending a four-day winning streak that was the longest since August. 
  • Aluminum fell 1.5 percent in London to $1,709 a metric ton, its biggest drop in a week.
  • The metal will probably tumble next month as an “irrational” increase in prices prompts companies to restart plants, while new capacity also ramps up in the world’s largest supplier, according to China’s top metals industry group. 
  • Copper lost 1.1 percent. 
  • Gold for immediate delivery was little changed at $1,169.66 an ounce.

Currencies

  • The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, added 0.2 percent after falling 0.4 percent on Monday.
  • The euro weakened 0.4 percent to $1.0720 after ending Monday up 0.9 percent, erasing an earlier slide of as much as 1.5 percent in the wake of the Italian vote.
  • The pound touched a two-month high as the U.K.’s top court heard a second day of arguments in a court case over who has the right to trigger Britain’s exit from the European Union, climbing as much as 0.3 percent to $1.2775.
  • The Australian dollar fell 0.2 percent to 74.61 U.S. cents after the nation’s central bank kept interest rates unchanged and Governor Philip Lowe said “some slowing in the year-ended growth rate is likely.”

Bonds

  • Italy’s 10-year bond yields declined by one basis point, or 0.01 percentage point, to 1.98 percent, after Monday’s increase of eight basis points.
  • Yields on Portugal’s bonds with a similar due date decreased four basis points to 3.66 percent, while Germany’s rose two basis points to 0.35 percent.
  • Almost all economists surveyed by Bloomberg expect the ECB to announce on Thursday that its bond-buying program will be extended after March, and most foresee an extension of about six months at the current 80 billion euros ($86 billion) a month.
  • Ten-year Treasury yields edged down by one basis point to 2.39 percent.
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