U.S. stocks rose, snapping a four-day slump and halting a global slide, as retailers led gains after reporting better-than-estimated earnings. Ten-year Treasury yields retreated from the highest levels since 2011 and the dollar weakened.
The Standard & Poor’s 500 Index added 0.6% to 1,656.03 at 2:37 p.m. in New York, rebounding from a six-week low. The MSCI All-Country World Index was little changed after erasing a drop of as much as 0.7% while the Stoxx Europe 600 Index slid 0.8% and the MSCI Emerging Markets Index tumbled 1.2%. Ten-year Treasury yields slid six basis points to 2.82% while oil slipped 2%. The Bloomberg U.S. Dollar Index retreated 0.3%.
Best Buy Co., Urban Outfitters Inc. and TJX Cos. led gains in the S&P 500 after earnings beat estimates. Investors withdrew $8.4 billion from emerging-market exchange-traded funds this year as weakening economies from India to Indonesia fueled pessimism in markets already concerned the Federal Reserve will start cutting bond purchases in September. The central bank publishes minutes of its July meeting tomorrow.
“We had some pretty good retail earnings, it just shows the consumer is not dead and that things are moving in the right direction,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a phone interview. His firm manages about $1.7 billion. “Everyone is still focused on Fed tapering. We remain cautiously bullish with pretty full exposure to stocks.”
Benefits of more bond purchases “are likely to be negligible,” Richmond Fed President Jeffrey Lacker said in an interview in Richmond Times-Dispatch newspaper on Aug. 18.
Retailers in the S&P 500 rallied 1.4% as a group as 30 of 32 companies advanced. Best Buy jumped 10% after posting results that exceeded projections and its largest quarterly profit in more than two years. J.C. Penney Co. added 6.1% amid signs the company’s sales slide is slowing and after Bloomberg News reported that a person familiar with the matter said hedge-fund manager J. Kyle Bass is betting on a comeback by the company in credit markets.
Urban Outfitters jumped 9.7% after earnings-per- share beat estimates by 6.7% and Wedbush Securities Inc. raised its rating on the stock. Zillow Inc. dropped 4.2% after the operator of the largest U.S. real-estate website announced a share sale.
About four shares declined for each that advanced in the Stoxx 600. CRH Plc sank 2.2% in London after the cement maker cut its second-half earnings guidance, citing weak demand from the euro region. HeidelbergCement AG lost 2.5%. John Wood Group Plc, a U.K. oil-services provider active in Africa and the Middle East, tumbled 8% after cutting the profit outlook at its engineering division.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.