Stocks rose, sending U.S. benchmark indexes above their highest closing levels in more than four years, the euro gained and commodities headed for a bull market amid speculation leaders will make progress on Greece’s debt crisis. Irish benchmark yields reached the lowest since 2010.
The S&P 500 climbed 0.2 percent to 1,420.24 at 11:46 a.m. in New York, its highest level since May 2008, and the Dow Jones Industrial Average traded above its best closing level since December 2007. The euro appreciated 1 percent to $1.2469 and Ireland’s nine-year bond yield fell as low as 5.96 percent. Germany’s two-year yield rose above zero for the first time in more than five weeks. The S&P GSCI gauge of raw materials climbed 1.1 percent as soybeans reached a record.
Luxembourg Prime Minister Jean-Claude Juncker, the head of the euro group of finance ministers, visits Greece tomorrow. German Chancellor Angela Merkel and French President Francois Hollande meet in Berlin on Aug. 23, before holding separate talks with Greek Prime Minister Antonis Samaras later in the week. International creditors may adjust the interest on Greek bailout loans, Norbert Barthle, a senior lawmaker of Merkel’s party, was quoted as saying by the Passauer Neue Presse.
“The odds have increased that the Europeans will craft some kind of devil’s bargain,” Michael Shaoul, chairman of Marketfield Asset Management, which oversees about $2.7 billion in New York, said in a Bloomberg Television interview. “At the same time that that’s going on, U.S. economic data’s been a lot better.”
Market Leaders
The S&P 500 has rebounded almost 11 percent from a five- month low in June as gauges of energy, technology and financial companies climbed more than 12 percent to lead the advance. The index remains about 9 percent below its record high of 1,565.15 reached in October 2007.
Urban Outfitters Inc. rallied 18 percent today after posting second-quarter profit that topped analysts’ estimates as sales gained at all of its main brands. Nordson Corp., which makes equipment used to apply adhesives and sealants in manufacturing, gained 13 percent after forecasting fourth- quarter profit that exceeded projections.
Best Buy Co. tumbled 4.2 percent and reached a nine-year low after reporting profit that trailed estimates and suspending its earnings forecast as sales of computers and televisions dropped.
Traders also awaited policy clues from the Federal Reserve. Minutes of the central bank’s last meeting will be released tomorrow, and the Fed will hold a summit at the end of the month in Jackson Hole, Wyoming.
‘Too Aggressively’
Fed Bank of Atlanta President Dennis Lockhart said U.S. policy makers face a risk of easing too much while trying to spur a “disappointing” three-year-old economic recovery.
“There is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reforms that involve making tough choices about the allocation of public resources,” Lockhart said today in a speech in Atlanta. While “monetary policy can exert a powerful positive influence on an economy,” it “is not a panacea.”
The Stoxx Europe 600 Index climbed 0.5 percent as more than three shares advanced for every one that declined. Julius Baer Group Ltd. added 3.1 percent as the wealth manager founded in 1890 reduced its rights offer to 500 million Swiss francs ($516 million) from 750 million francs. Straumann Holding AG tumbled 13 percent, the most since 2008, after the world’s biggest maker of dental implants reported first-half profit that fell.
Euro Strengthens
The euro appreciated against 14 of its 16 major peers, advancing 1 percent versus the yen. Japan’s currency weakened against 14 of its 16 main counterparts.
Concessions are possible for Greece so long as Samaras shows a willingness to meet the main targets set out in his country’s bailout program, a senior lawmaker with Chancellor Angela Merkel’s party said.
A precedent for program adjustments was made with the first Greek bailout, when the country secured lower interest rates and longer maturities on bilateral loans than those originally set, Norbert Barthle, the Christian Democratic Union’s budget spokesman in parliament, said today in a telephone interview.
“I’m expecting to hear European leaders expressing their willingness in coming to a consensus in terms of what steps are necessary to make this thing work,” said Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion. “Any kind of concession toward allowing Greece more time, more lenient terms in the interest rates or financing, would be welcome.”
Yield Watch
German 10-year bonds fell a second day, pushing the yield five basis points higher to 1.55 percent. The rate on similar- maturity U.S. Treasuries rose four basis points to 1.85 percent.
Spain’s two-year note yield fell for a sixth day, dropping 10 basis points as the government sold 4.51 billion euros ($5.6 billion) of bills, meeting its maximum target. Portuguese 10- year bonds advanced, pushing the yield down 35 basis points to 9.25 percent, the lowest since May 2011.
Corn, wheat and Brent crude have led the GSCI commodities gauge rally from the closing low on June 21, surpassing the 20 percent threshold that signals a bull market. Silver, soybeans and cotton climbed more than 2 percent to lead gains among 20 of the index’s 24 commodities today. Crude oil gained 1.3 percent to $97.25 a barrel in New York.
Emerging-market stocks advanced after China injected record funds into its banking system.
The MSCI Emerging Markets Index rose 0.8 percent, the most since Aug. 9. The Shanghai Composite Index gained 0.5 percent. The People’s Bank of China conducted 220 billion yuan ($34.6 billion) of reverse-repurchase operations, the most in a single day, according to a trader at a primary dealer required to bid at the auctions. Benchmark gauges in Russia, India and Taiwan gained at least 1 percent.
