Stocks surged, with the Standard & Poor’s 500 Index climbing to its highest closing level ever, and metals gained as the dollar slid after Federal Reserve Chairman Ben S. Bernanke called for maintaining stimulus.
The S&P 500 rose 1.4% to 1,675.03 at 4 p.m. in New York while emerging-market stocks advanced the most in almost 10 months. Treasuries rose and gold futures rallied 3% for a fourth straight advance, the longest winning streak since April. Bloomberg’s Dollar Index, a gauge of the currency against 10 major peers, sank 1.4%. Portugal’s PSI 20 Index slid 2% and the nation’s bonds slid amid concern a political crisis will persist.
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 want to see more signs of job growth before starting to scale back their $85 billion-a-month bond purchases. About $5.3 trillion was erased from global equities between May 21 and June 24 after Bernanke signaled that the central bank could start tapering asset purchases this year.
“Everyone realizes that Fed policy is going to remain extraordinarily accommodative,” Hank Smith, who oversees $7 billion as chief investment officer at Radnor, Pennsylvania- based Haverford Trust Co., said by telephone. “The market has adjusted to this and we’re back to where we were prior to the Fed’s announcement of what was really a very subtle shift in policy.”
The S&P 500 rose for a sixth straight day, its longest rally since March, with trading volumes 8% higher than the 30-day average at this time of day. The benchmark index has recouped all of a 5.8% slide from May 22 to June 24 triggered after Bernanke told Congress the Fed could taper its bond purchases if the economy continues to improve. The Nasdaq-100 Index has climbed for 12 straight sessions, the longest rally in three years.
All 10 of the main industry groups in the S&P 500 advanced, with technology, utility and commodity companies leading gains. Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. rose at least 4.6% as gold rallied. Advanced Micro Devices Inc. rose 12% as analysts recommended that investors buy the shares.
Microsoft Corp. jumped 2.8% after saying it is reorganizing into fewer units and shuffling senior management roles to speed development of hardware and Web-based services.
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