U.S. stocks, commodities gain on Draghi comments as dollar falls

July 26 (Bloomberg) -- U.S. stocks snapped four days of losses, while the dollar slid and commodities rose as European Central Bank President Mario Draghi pledged to preserve the euro and data showed improvement in the American economy.

The Standard & Poor’s 500 Index climbed 1.7 percent at 9:41 a.m. in New York. The Stoxx Europe 600 Index jumped 2.1 percent. The euro appreciated 1.1 percent to $1.2291 as the dollar weakened against 15 of its 16 major peers. The S&P GSCI gauge of 24 commodities rose 1 percent. Spain’s 10-year bond yield tumbled 39 basis points to 6.99 percent after reaching the highest in the euro era yesterday.

Global stocks rallied as Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc. Fewer Americans than forecast filed jobless claims last week and durable-goods orders climbed more than projected in June.

Draghi “dampened some of the fears that something was going to come apart imminently,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management. His firm oversees about $320 billion. “He’s basically saying there’s still a lot of will of the ECB leadership to do whatever it takes to keep this thing together.”

More than 60 companies in the S&P 500 are reporting results today. Of the 263 index members to have reported results this quarter, 72 percent have topped analysts’ projections, according to data compiled by Bloomberg.

Jobless Claims

Applications for jobless benefits decreased by 35,000 in the week ended July 21 to 353,000, Labor Department figures showed. Economists forecast 380,000 claims, according to the median estimate in a Bloomberg survey. Bookings for goods meant to last at least three years rose 1.6 percent for a second month, a report from the Commerce Department showed. The median forecast of economists surveyed by Bloomberg News called for a 0.3 percent gain.

Unilever, the world’s second-largest consumer-goods maker, rallied 5.5 percent in Amsterdam as sales growth beat analysts’ estimates. Rolls-Royce Holdings Plc, the world’s second-largest maker of aircraft engines, rose 6.8 percent as underlying pretax profit topped forecasts.

Royal Dutch Shell Plc, Europe’s biggest oil company, dropped 2.6 percent in London after reporting a bigger decline than projected in second-quarter earnings. Siemens AG, the region’s largest engineering company, slid 1.4 percent after saying its full-year earnings goal has become harder to reach.

Euro, Yen

The euro rallied 1.2 percent to 96.14 yen and higher-yielding currencies including the New Zealand dollar strengthened most against their major peers. Italy’s two-year note yield fell 71 basis points to 4.23 percent. Rates on Germany’s 10-year bonds climbed six basis points to 1.33 percent, and yields on similar-maturity Treasuries increased two basis points to 1.42 percent.

The cost of insuring against default on corporate debt declined for a second day, with the Markit iTraxx Europe Index of credit-default swaps linked to 125 investment-grade companies dropping eight basis points to 170.5. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments fell three basis points to 280.

Oil in New York climbed 1.3 percent to $90.15 and copper advanced 1.4 percent. Natural gas futures climbed 1.2 percent after falling the most in two weeks yesterday.

The MSCI Emerging Markets Index added 0.9 percent, heading for its first gain in five days. China’s Shanghai Composite Index fell 0.5 percent, the lowest level since March 2009 as speculation the government will maintain real-estate curbs overshadowed a State Council plan to develop the nation’s central provinces.

The ISE National 100 Index jumped 1.9 percent in Istanbul Turkey’s central bank said it may narrow its rates corridor. Benchmark indexes gained 1.2 percent in Poland and 1 percent in Russia.

Bloomberg News

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