U.S. stocks close at five-year high; Treasuries gain, yen falls

Market Leaders

Morgan Stanley jumped after earnings from the world’s biggest brokerage more than doubled and the firm reached profit-margin targets six months ahead of schedule. Of the 67 index members that have posted quarterly earnings so far in the earnings season, 72 percent exceeded analysts’ profit estimates, according to data compiled by Bloomberg.

Intel tumbled after the world’s largest semiconductor maker prepared for a third straight quarter of declining sales, highlighting the chipmaker’s struggle to adapt in a world embracing mobile devices. Capital One sank 8.1 percent after quarterly profit missed analysts’ estimates.

U.S. markets will be closed on Jan. 21 in observance of the Martin Luther King Jr. holiday.

European Markets

European stocks were little changed, with the Stoxx Europe 600 Index slipping 0.1 percent today to erase a weekly gain. Rio Tonto Group added 1.8 percent after Goldman Sachs Group Inc. said the world’s second-biggest mining company may buy back shares. Ophir Energy Plc gained 2.5 percent as Nomura Holdings Inc. raised its recommendation on the stock. Telenet Group Holding NV slid 2.6 percent as Liberty Global Inc. said it won’t reopen its bid for the company.

The euro fell 0.4 percent to $1.3323 after a European Central Bank official said the ECB doesn’t have a view whether banks should repay funds when the possibility comes up, damping bets short-term interest rates will rise.

The shared currency slid from almost the highest since February 2012 after ECB Executive Board member Benoit Coeure said he doesn’t expect repayments to affect the Eonia rate, an overnight interest rate for the interbank market. The pound dropped against 15 of 16 major peers after U.K. retail sales unexpectedly fell.

China Growth

Zinc and lead rallied at least 0.7 percent after the GDP report from China, the world’s largest buyer of industrial metals. Oil was little changed at $95.56 a barrel to cap a sixth weekly advance, the longest streak in 14 months.

Natural gas futures climbed 2.1 percent to a six-week high of $3.566 per million British thermal units and spot prices led gains among 24 commodities in the S&P GSCI Index amid forecasts for colder weather in the eastern U.S. Wheat rallied more than 1 percent to cap a 4.8 percent five-day gain, the biggest for a week since July, as a lingering U.S. drought threatened this year’s harvest in the world’s largest exporter.

The yen was down 0.2 percent at 90.06 per dollar, while strengthening against 10 of 16 major peers.

The yen needs to return to a rate that helps the economy and “100 yen is a good level,” said Koichi Hamada, adviser to Japan’s prime minister in choosing a new central bank governor. The Bank of Japan may decide to conduct open-ended asset buying to stoke inflation at a meeting starting Jan. 21.

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