Stocks rose, sending the Standard & Poor’s 500 Index above its highest closing level ever, and metals gained while the dollar retreated after Federal Reserve Chairman Ben S. Bernanke called for maintaining monetary stimulus. Portuguese equities and government debt fell amid political turmoil.
The S&P 500 rose 1.1% to 1,670.17 at 9:38 a.m. in New York while emerging-market stocks headed for their biggest advance in almost 10 months. Treasuries rose and gold rallied more than 2% in the longest winning streak since April. Bloomberg’s Dollar Index sank 1%. Corporate credit risk fell in Europe to the lowest in more than a month. Portugal’s PSI 20 Index slid 1.7%.
Bernanke said yesterday that “highly accommodative monetary policy for the foreseeable future is what’s needed” and minutes of the Fed’s June meeting showed officials would want to see more signs of job growth before starting to scale back their $85 billion-a-month bond purchases. The Bank of Japan said at the end of its two-day meeting today it would retain its plan for monetary stimulus. Portuguese President Anibal Cavaco Silva said early elections now are undesirable.
“There is indeed some relief in the market,” said Michiel de Bruin, who oversees about $30 billion as head of euro- denominated government bonds at F&C Group in Amsterdam. “It was more of a balanced story rather than a very hawkish one” from Bernanke, he said.
The S&P 500 rose 1 for a sixth straight day. The U.S. stock benchmark has recovered losses following a 4.8% drop from June 19 to June 24 and is up 16% in 2013.
Benchmark 10-year Treasury yields declined three basis points to 2.60%, after climbing to 2.75% earlier this week, the highest since August 2011. German 10-year bond yields fell two basis points to 1.64%.
The number of Americans filing for unemployment benefits unexpectedly increased to a two-month high of 360,000 last week, Labor Department figures showed. The median forecast of 47 economists surveyed by Bloomberg called for a drop to 340,000. Claims are difficult to adjust in July for seasonal events such as vehicle plant shutdowns and the Independence Day holiday, a Labor Department spokesman said as the data were released.
Global equities have lost about $3 trillion in value and 10-year Treasury yields have surged more than 50 basis points since May 22, when Bernanke indicated the central bank may reduce its bond-buying program as economic risks subside.