May 29 (Bloomberg) -- U.S. stocks rose, adding to last week’s rally, amid speculation Greece will stay in the euro after polls showed voters supporting politicians who back the nation’s bailout. Commodities erased earlier gains while Treasuries advanced.
The Standard & Poor’s 500 Index added 0.9 percent at 3:19 p.m. in New York, paring a rally of as much as 1.3 percent. The Stoxx Europe 600 Index climbed 0.8 percent and the MSCI Emerging Markets Index jumped 1.3 percent. The Dollar Index, a gauge of the currency against six major peers, added 0.1 percent as the euro weakened 0.4 percent to an almost two-year low of $1.2488. Ten-year Treasury yields were little changed at 1.73 percent. The S&P GSCI Index of commodities lost 0.4 percent.
U.S. equities gained after Greece’s New Democracy party placed first in all six opinion polls published on May 26 as campaigning continued for the general election on June 17. U.S. markets were closed yesterday for the Memorial Day holiday. Home values in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year, a report showed today, while the Conference Board’s gauge of consumer confidence unexpectedly dropped.
“There’s also a bit of relief that we won’t have any imminent kicking-out or defaulting of Greece,” Brad Sorensen, director of market and sector analysis at San Francisco-based Charles Schwab Corp., said in a phone interview. His firm has $1.83 trillion in client assets. “We’re definitely seeing signs of stabilization on the housing front. The economy is looking decent. Relatively speaking, the U.S. is a good place to be.”
Stocks also rose amid speculation China will do more to stimulate its economy. The nation has no plans to introduce measures on the scale deployed during the global financial crisis, the official Xinhua News Agency reported.
“The Chinese government’s intention is very clear: It will not roll out another massive stimulus plan to seek high economic growth,” Xinhua said today in the seventh paragraph of a Chinese-language article on economic policy, without attributing the information. “The current efforts for stabilizing growth will not repeat the old way of three years ago.”
The S&P 500 increased for the fifth time in six trading sessions. The index on May 25 capped its first weekly rally since April, jumping 1.7 percent, as investors were lured by the cheapest valuations since November.
Rebound After Slump
Equities rose after a three-week, 7.7 percent decline pushed the S&P 500’s price-to-earnings ratio to 13.1 on May 18, below the average of 16.4 since 1954, according to data compiled by Bloomberg. The benchmark gauge started today’s session down 5.7 percent in May, heading for its biggest monthly retreat since September, amid concern global economic growth is slowing and Greece may leave the euro area.
Indexes of commodity and technology companies led gains among all 10 of the main industries in the S&P 500 today, rising at least 1 percent. Caterpillar Inc., Alcoa Inc. and Bank of America Corp. rose at least 2.4 percent for the biggest gains in the Dow Jones Industrial Average.
Facebook Inc. shares fell to a new low, extending losses from the worst-performing large initial public offering during the past decade to more than 20 percent. The stock fell as much as 10 percent to $28.65. Facebook options trading began today, with volume for puts exceeding calls by 1.3-to-1, data compiled by Bloomberg show. More than 180,000 puts giving the right to sell traded. June $30 puts were the most-active contracts, with volume topping 22,000.
The S&P/Case-Shiller index of property values fell 2.6 percent from a year earlier after a 3.5 percent drop in February, the group reported today in New York. The decline matched the median forecast of economists surveyed by Bloomberg News. The Conference Board’s consumer confidence index decreased to 64.9 this month from 68.7. Economists forecast an increase to 69.6, according to the median estimate in a Bloomberg survey.