U.S. stocks advance with commodities while Treasuries retreat

U.S. Movers

Bed Bath & Beyond Inc. gained 4.3% after raising the low end of its earnings forecast. Apple Inc. added 0.5% as Morgan Stanley said iPhone demand is “tracking significantly ahead of expectations.” Eli Lilly & Co. fell 3.7% after its experimental drug ramucirumab failed to meet its goals for treating breast cancer in a late-stage trial. Hertz Global Holdings Inc. sank 17%, the most in two years, after cutting its forecasts.

The yield on 10-year Treasury notes has fallen from a two- year closing high of 2.99% on Sept. 5 after the Federal Reserve last week said it will continue with its $85 billion in monthly bond purchases, surprising investors who expected the central bank to begin tapering its stimulus.

Fed Watch

Fed Bank of Richmond President Jeffrey Lacker said in Stockholm that the size of the Fed’s balance sheet increases the risks and the costs of policy errors. Fed Bank of Minneapolis President Narayana Kocherlakota, a voter on policy next year, said the Fed must do “whatever it takes” to strengthen a job market that is healing too slowly.

Japanese Prime Minister Shinzo Abe will announce an economic stimulus package on Oct. 1 at the same time as his decision on whether to raise the country’s sales tax, ruling Liberal Democratic Party tax panel chief Takeshi Noda told reporters today. The nation plans to pledge to promptly start a study on cutting the effective corporate tax rate, Kyodo News reported, without citing anyone.

The Topix climbed to 1,220.49 at the close in Tokyo, its highest since July 23.

The yen briefly pared declines versus the dollar after an advisory panel for Japan’s Government Pension Investment Fund said the administration should review its portfolio. Takatoshi Ito, an economist who leads the panel, said in an interview earlier this week that there “was a consensus” to reduce the fund’s allocation to government bonds.

Japan’s currency weakened 0.5% to 98.93 per dollar, after sliding as much as 0.7% before the pension fund announcement. It was down 0.2% at 133.42 per euro. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, gained 0.3%.

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