U.S. stocks rose for a third day as investors awaited the start of second-quarter earnings season and euro-area finance ministers approved aid for Greece. European equities recovered from a July 5 slide, while shares and currencies in Asia declined.
The Standard & Poor’s 500 Index added 0.5% at 4 p.m. in New York and the Russell 2000 Index of smaller U.S. companies rose 0.4% to a record. The Stoxx Europe 600 Index gained 1.4% after losing 1.3% on July 5, while the MSCI Asia Pacific Index slid 1.4%. The yield on 10-year Portuguese debt slipped 20 basis points to 6.93%. U.S. Treasuries rose after 10-year yields surged to a near two-year high. Egyptian shares tumbled the most in three weeks. Natural gas jumped more than 3% to lead commodities higher.
The S&P 500 climbed to a three-week high, adding to a 1% rally on July 5 after better-than-estimated U.S. jobs growth overshadowed concern the Fed will reduce stimulus. Alcoa Inc. started the U.S. earnings season after markets closed in New York, reporting a per-share profit of 7 cents that beat the average analyst estimate of 6 cents. After markets closed in Europe, governments approved 3 billion euros ($3.9 billion) in aid to Greece, according to two European officials.
“The market appears to be discounting a strengthening economy in the second half and into 2014 and the earnings season really should give us some clarity as to whether that’s appropriate or not,” Gary Flam, who helps oversee $7 billion at Bel Air Investment Advisors LLC in Los Angeles, said in a phone interview. “I really don’t think the earnings season is going to be so much about the second quarter, but more about the pickup in second half that the market appears to be anticipating.
Global equities lost more than $3.8 trillion in value and U.S. Treasury yields climbed to an almost two-year high since Fed Chairman Ben S. Bernanke signaled May 22 that the central bank’s asset-buying program could be tapered should the job market continue to improve. The purchases, currently at $85 billion a month, helped the MSCI World Index of developed markets rally 19% in the past year.
Trading of S&P 500 stocks was in-line with the 30-day average while volume for Dow Jones Industrial Average companies was 17% below average, data compiled by Bloomberg show.
Dell Inc. rallied 3.1% after Institutional Shareholder Services Inc., the biggest shareholder-advisory firm, said investors should accept founder Michael Dell’s buyout offer. Priceline.com Inc. added 3.9% after Morgan Stanley raised its recommendation on the stock.