Stocks advance amid corporate earnings optimism while yen falls

VIX Rebounds

The VIX, as the Chicago Board Options Exchange Volatility is known, rose 1.7% to 13.85, erasing earlier losses and snapping a six-day slump. The index earlier today touched 13.22, the lowest level since 2007.

Alcoa Inc. was little changed after reporting late yesterday that fourth-quarter sales fell to $5.9 billion from $5.99 billion, beating the $5.6 billion average of 11 estimates. Profit excluding one-time items was 6 cents a share, matching the average of estimates compiled by Bloomberg. The largest U.S. aluminum producer said demand for the metal in China will gain 11% this year.

More than two shares advanced for every one that declined in the Stoxx 600 as telecommunications companies and banks led gains. The index climbed to the highest level since Feb. 18, 2011. The volume of trading in Stoxx 600 shares was 70%  greater than the 30-day average, Bloomberg data show.

Stake Sale

Delta Lloyd NV jumped 6.6%, the biggest gain in six months, after Aviva Plc sold its 19.4% stake in the Dutch insurer for 433.8 million euros ($568 million). J Sainsbury Plc dropped 2.9% after the U.K.’s third-largest supermarket chain reported the slowest sales growth in eight years.

Natural gas tumbled 3.3% to a 15-week low, leading losses in commodities, on speculation that unusually mild weather next week will curtail demand for the heating fuel. Oil slipped 5 cents to $93.10 a barrel after a government report showed that U.S. crude and fuel inventories surged as production advanced to a 19-year high.

The yen weakened 0.8% to 87.78 per dollar, ending a two-day advance. It declined 0.7% per euro. The 17-nation shared currency dropped 0.2% to $1.3060.

Treasury 10-year note yields fell one basis point to 1.86%, declining for a fourth straight days. The U.S. auction of $21 billion in 10-year notes was met with weaker-than-average demand. The notes drew a yield of 1.863%, compared with a forecast of 1.849% in a Bloomberg News survey of eight of the Federal Reserve’s primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.83, compared with an average of 3 for the previous 10 sales.

Portugal Bonds

The yield on Portugal’s 10-year bonds rose five basis points to 6.51% on bets the nation will sell bonds for the first time since its international bailout after Ireland sold debt yesterday.

The MSCI Emerging Markets Index added 0.4%, snapping a three-day decline. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.9% as automakers advanced. Credit Suisse Group AG recommended buying shares in China’s carmakers.

Egypt’s EGX 30 Index gained 1.1% to the highest since October. Qatar said yesterday it doubled deposits at Egypt’s central bank, helping ease a currency crisis. Benchmark gauges in Hungary and Israel rose more than 2%, while Brazil’s Bovespa increased 0.7%.

Bloomberg News

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