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 largest economy. Industrial metals retreated on concern about China’s growth.
The S&P 500 added 0.4% to 1,640.44 at 9:55 a.m. in New York after the Shanghai Composite Index lost 1.1%. Copper slid more than 2% to lead commodities lower. Japan’s currency was little changed near a four-year low around 102 per dollar. Ten-year Treasury yields fell two basis points to 1.90%, retreating from the highest level since March. Spain’s 10-year bonds erased earlier declines as the nation sold government debt via banks, while Italian notes rebounded.
U.S. equity index futures erased losses before the open of exchanges in New York as David Tepper, co-founder and owner of Appaloosa Management, 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.”
There’s $400 billion looking for a place to invest and markets shouldn’t worry about the Federal Reserve tapering its stimulus program, Tepper said in an interview on CNBC.
U.S. equity-index futures and global stocks fell before the open of exchanges on concern about global growth. China’s economy will probably grow 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 15% this year and has extended its rebound from a bear- market low in 2009 to more than 142%.
Bank of America Corp., JPMorgan Chase & Co. and Travelers Cos. rose at least 0.9% to lead the Dow’s gain today. Tepper, who led Institutional Investor’s ranking of the top earners in hedge funds last year with $2.2 billion, said Appaloosa still owns stock of Citigroup Inc. and other U.S. banks and called them a “good sector.”
Take-Two Interactive Software Inc. rallied 5% after the publisher of the “Grand Theft Auto” video games reported profit that beat analyst estimates.
Among European stocks, Lonmin Plc sank 6.5% as the world’s third-largest platinum producer halted operations at its Marikana mine in South Africa after workers refused to go underground. Jeronimo Martins SGPS SA slid 5.5% after Asteck SA sold half its 10% stake in Portugal’s biggest retailer.
Severn Trent Plc, the U.K.’s second-largest publicly traded water company, jumped 13% to a record after receiving an approach from a group comprised of Borealis Infrastructure Management Inc., the Kuwait Investment Office and Universities Superannuation Scheme.
The MSCI Emerging Markets Index snapped a three-day slump, rising 0.2% as a stronger yen boosted exporters. Benchmark gauges in South Korea, the Philippines, Poland and Turkey added at least 0.7%, and India’s Sensex rebounded from its biggest drop in a year.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slid 0.7%, extending a 2.1% decline yesterday when reports showed industrial production missed estimates and fixed-asset investment unexpectedly slowed last month.
“The April data suggests that domestic demand remains on the weak side, and by extension has also caused the softening in the service sector,” JPMorgan wrote in the report, cutting its growth estimate for China.
Copper for three-month delivery slid 2.2% to $7,250 a metric ton on the London Metal Exchange, falling for the first time in three days and leading losses in commodities. West Texas Intermediate crude slipped 0.3% to $94.89 a barrel even as the International Energy Agency increased its forecast for global oil demand in 2013 for the first time since January.
The yen climbed against all but two of its 16 major peers and the euro was little changed at $1.2977.
Sweden’s krona sank after a report showed consumer prices declined more than most economists predicted in April. The currency dropped 0.4% to 8.61698 per euro.
Spain’s 10-year bond yield was little changed at 4.28%. The nation sold one-year bills to yield less than 1% for the first time since April 2010. The rate on Italy’s 10-year note fell three basis points to 3.95%.
The Netherlands sold five-year notes at a record-low yield of 0.611%.
Australia’s dollar fell to an 11-month low as the government’s forecast of slower growth fanned speculation the Reserve Bank will cut borrowing costs to support the economy. The Aussie weakened 0.3% to 99.19 U.S. cents.