Stocks rose, sending the Standard & Poor’s 500 Index to a record for a fifth day, amid better-than- projected earnings forecasts. European shares and metals gained as China’s trade and German industrial output beat estimates.
The Standard & Poor’s 500 Index added 0.4% to 1,632.68 as of 4 p.m. in New York and the Stoxx Europe 600 Index climbed 0.6% to an almost five-year high. Copper, lead, natural gas and gold rose more than 1.5% to lead commodities higher while the Dollar Index lost 0.4%. Ten- year Treasury yields were little changed 1.77% after surging 15 points in three days. The New Zealand dollar weakened against all 16 major peers after the Reserve Bank said it sold the so-called kiwi to protect the economy.
Whole Foods Market Inc. and Electronic Arts Inc. surged more than 10% to lead gains in the S&P 500 after earnings projections exceeded analyst estimates. China’s export and import growth unexpectedly accelerated in April and German industrial production increased for a second month in March, reports showed today.
“We’ve recovered from the nervousness that we saw in the market in April and we’ve built a nice base here,” Peter Jankovskis, who helps oversee $3.5 billion as co-chief investment officer of Lisle, Illinois-based Oakbrook Investments LLC, said by phone. “We’ve gotten through the earnings season and we’re turning to the phase in the quarter where economic reports will determine if the market can hold up.”
Technology, commodity and telephone shares rose at least 0.8% to lead gains in nine of the 10 main industry groups in the S&P 500. UnitedHealth Group Inc., Alcoa Inc. and Hewlett- Packard Co. climbed more than 2.6% for the biggest gains in the Dow Jones Industrial Average, which climbed 48.92 points to 15,105.12. Symantec Corp. lost 2.4% after it said quarterly sales and revenue will miss analyst estimates.
News Corp. and Monster Beverage Corp. are among five S&P 500 companies reporting earnings today. About 72% of companies that have released results since the start of the earnings season have exceeded profit projections, while 52% have missed sales estimates, data compiled by Bloomberg show.
The S&P 500 has risen 14% this year and is up 141% from its bear-market low in 2009 as earnings growth and stimulus measures from the Federal Reserve fueled the rally.
Investors are set to “enjoy historically high excess returns” in the S&P 500 until 2018, according to Federal Reserve Bank of New York economists Fernando Duarte and Carlo Rosa. The main reason for the high premium is low Treasury yields at all time horizons, the economists said.
Stanley Druckenmiller, the billionaire who shut down his hedge fund in 2010 after averaging annual returns of 30% since 1986, said financial markets will continue their rally for now. He also said investors should bet against the Australian dollar in a presentation at the Sohn Investment Conference in New York. The Aussie dollar slipped for a third day after the remarks, weakening 0.2% to $1.0167.
U.S. stocks could end the year up 25% to 30%, according to Michael Novogratz, head of liquid markets at Fortress Investment Group LLC.
“There is nothing on the horizon that gets me scared,” he said in an interview today with Erik Schatzker on Bloomberg Television.“Things are healing in the U.S.”
Novogratz said he expects the Japanese yen to continue to weaken against the dollar, adding that it could reach 120 per dollar by the end of the year. The yen, which was trading at 98.88 today in New York, has weakened more than 20% against the U.S. currency in the past six months amid expectations of expanded monetary easing by the Bank of Japan.
About three shares advanced for every one that fell in the Stoxx 600. ING Groep NV, the biggest Dutch financial-services company, added 3.1% and Deutsche Telekom AG, Germany’s largest phone company, climbed 4.7%. Standard Chartered Plc slid 4.4% after the bank said operating profit in the first quarter declined “slightly.”
The MSCI Emerging Markets Index gained for a fourth day, adding 0.8% to an almost two-month high. Benchmark gauges in Taiwan, Turkey and South Africa climbed more than 1%.
Turkish banks lifted the nation’s benchmark stock index to a record as investors speculated S&P will raise the nation to investment grade and as Kurdish militants started withdrawing from the country today.
Turkey’s banking index advanced 2.6% to the highest level since at least May 2001, driving the Borsa Istanbul gauge of 100 largest stocks up 1.6% to 90,852.21 at the close in Istanbul. Financial stocks have a 57% weighting in the benchmark measure, according to data compiled by Bloomberg.
The Hang Seng China Enterprises Index of mainland companies rose 1.5% and the Shanghai Composite Index added 0.5 percent
Chinese exports surged 14.7% in April and imports advanced 16.8% last month, while the trade surplus was a higher-than-projected $18.2 billion, data from the General Administration of Customs showed.
Export growth accelerated even as shipments to the U.S. and Europe fell, spurring Bank of America Corp. and Mizuho Securities Co. analysts to say the figures were inflated by fake reports.
“The Chinese trade data are the first sign in a while that the economy is doing better, and they are importing and exporting more commodities,” Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge Group SA in London, said by e-mail today. “The Chinese economic figures have not been satisfactory for most of this year, so any change will have a positive reaction in commodities including metals prices.”