Stocks rose for a second day and industrial metals rallied as slower-than-forecast Chinese inflation eased pressure on policy makers to tighten credit. The yen rebounded after a three-day slump took it to the weakest level since 2009 while the dollar weakened versus most peers.
The MSCI All-Country World Index advanced 0.6% at 4 p.m. in New York. The Standard & Poor’s 500 Index rose 0.4% to 1,568.61 and Brazil’s benchmark index jumped 1.4%. Ten-year Treasury yields were little changed at 1.75% after declining earlier. The S&P GSCI gauge of 24 commodities added 0.8% with silver, copper, zinc and gold helping lead gains. The yen rose 0.4% to 99 per dollar, while the U.S. currency slid against 15 of 16 major peers.
China’s inflation eased more than forecast last month from a 10-month high as food-price gains ebbed. Federal Reserve Chairman Ben S. Bernanke said economic conditions were far from where he would like them to be. The two-day rally in stocks erased most of last last week’s 1% drop in the S&P 500, its worst loss of the year. Nine companies in the benchmark gauge of U.S. equities are scheduled to report quarterly results this week.
“The commodity pop is basically tied to the view on China,” Ralph Shive, the South Bend, Indiana-based manager of the $1.2 billion Wasatch-Large Cap Value Fund, said in a phone interview. “The market is acting strongly. It doesn’t seem to want to go down. You get dips, and they seem to pop right back.”
Gauges of commodity, telephone and financial companies rose at least 0.7% to lead the advance among nine of the 10 main industries in the MSCI All-Country World Index. The global benchmark has retreated about 1% from an almost five-year on March 15. The S&P 500 yesterday added 0.6% after disappointing jobs data dragged it lower last week.
Raw-material producers jumped 1.1% as a group to lead the advance among seven of the 10 main industries in the S&P 500 as Cliffs Natural Resources Inc. rallied 8.8%. First Solar Inc. jumped 46%, its best gain ever, after the world’s largest thin-film solar manufacturer forecast 2013 sales above estimates. J.C. Penney Co. reached 12% to $13.93, its lowest price since 2001, after ousting Chief Executive Officer Ron Johnson and reinstating his predecessor, Myron E. Ullman III.
Alcoa Inc., the largest American aluminum producer and first Dow Jones Industrial Average company to report quarterly results, closed unchanged as earnings exceeded analysts’ estimates while revenue trailed projections. The shares rallied 1.8% yesterday before the report.