S&P 500 rises above record close as euro gains with Italy bonds

Technology Stocks

U.S. technology stocks, the second-best performing industry of the past decade, have fallen to the cheapest levels in at least seven years and are vulnerable to more losses as analysts reduce second-quarter profit estimates.

Earnings at computer companies will fall 5.5% in the three months through June as consumers and government agencies cut spending, according to more than 2,000 analyst estimates tracked by Bloomberg. The group, led by Apple Inc. and International Business Machines Corp., trades at 13 times projected profit, the lowest level compared with the S&P 500 since Bloomberg began compiling the data in 2006.

Standard Pacific Corp., D.R. Horton Inc. and Toll Brothers Inc. paced a rally in homebuilders. The index of pending home sales increased 1.5% after a revised 1% decline the prior month that was larger than initially reported, figures from the National Association of Realtors showed. Economists forecast a 1% increase, according to the median estimate in a Bloomberg survey.

Economic Data

U.S. consumer spending rose more than projected in March, reflecting a jump in outlays for services that is unlikely to be repeated. Household purchases, which account for about 70% of the economy, climbed 0.2% after a 0.7% gain the prior month, a Commerce Department report showed. The median estimate in a Bloomberg survey of 74 economists called for spending to be little changed. Incomes increased less than forecast and inflation cooled to the lowest level in more than three years.

The Stoxx 600 pared its gain after a report showed economic confidence in the euro area decreased more than economists forecast in April. The regional benchmark index rose 3.7% last week, taking its advance for April to 0.7%. That would be its 11th straight monthly increase, the longest since 1997. The MSCI All-Country World Index rose 0.7% today. Japanese and Chinese equity markets closed for holidays.

European Movers

Aberdeen Asset Management Plc jumped 8% after increasing its dividend. Swedish Match AB gained 6.7% after posting first-quarter profit that beat estimates. Balfour Beatty Plc tumbled as much as 15% as the U.K.’s largest construction company said 2013 operating profit will be less than it had projected earlier.

The euro strengthened 0.4% to $1.3085 as it rose against 12 of 16 major peers.

The Frankfurt-based ECB will lower its benchmark rate to a record 0.5% when central bankers meet in Bratislava May 2, according to the median of 69 economist estimates compiled by Bloomberg.

Spain’s 10-year bond yield fell 12 basis points to 4.16%, the lowest since October 2010. Germany’s 10-year bund yield was little changed at 1.20% and the rate on 10-year U.S. Treasury notes was little changed at 1.66%.

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