U.S. stocks rose, sending the Standard & Poor’s 500 Index to a record for the eighth time in nine days, amid improving confidence in the world’s largest economy. Industrial metals fell on concern about China’s growth.
The S&P 500 added 1% to 1,650.34 at 4 p.m. in New York after the Shanghai Composite Index lost 1.1%. Copper slid more than 2% to lead commodities lower and oil extended its longest slump of the year. The yen dropped 0.4% at a four-year low of 102.26 per dollar. Ten-year Treasury yields erased earlier losses and rose five basis points to 1.97%, the highest level since March. The Dollar Index, a gauge of the currency against six major peers, added 0.4% to the highest level since July.
U.S. equity index futures erased losses before the open of exchanges in New York as David Tepper, the billionaire who runs Appaloosa Management Inc., told CNBC he’s still bullish and the economy is getting better. A report showed confidence among U.S. small businesses climbed in April to a six-month high as the outlook for the economy and sales brightened.
“We have had a melt-up with a lot of money chasing risk assets and driving stock prices up,” Allan Flader, a senior vice president at RBC Wealth Management, said in a phone interview from Phoenix. His firm oversees $235 billion. “I’m not saying the fundamentals aren’t getting better, the economic numbers are improving. But we just see that reach for yield, combined with the government backing the economy, and that’s helping markets in the near term.”
S&P 500 futures and global stocks fell before the open of exchanges on concern global growth will slow. China’s economy will probably expand 7.6% this year, down from an earlier forecast of 7.8%, JPMorgan Chase & Co. said in a report, citing weak domestic demand. Data today showed German investor confidence rose less than analysts predicted in May while euro- area industrial output beat forecasts in March.
The S&P 500 has rallied almost 16% this year and has extended its rebound from its bear-market low in 2009 to almost 144%.
“We think that it’s time to take a little off the table,” New York-based Brian Belski, chief investment strategist at BMO Capital Markets, said in a Bloomberg Television interview today. His year-end forecast for the S&P 500 is 1,575, 3.6% below yesterday’s close. “Markets aren’t linear for long, we could see a bit of a pullback,” he said. “This isn’t about just seasonality, it’s about a softening overall.”