Global stocks climb to 6-year high on IMF, Apple

Economic Data

U.S. household purchases, which account for almost 70% of the economy, rose 0.5% after a 0.4% gain in October that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast of 76 economists in a Bloomberg survey called for a 0.5% rise. Incomes climbed less than forecast, reflecting a slump in earnings by farmers.

A separate report showed consumer confidence increased in December. The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 82.5 from 75.1 a month earlier. The median forecast of 61 economists in a Bloomberg survey called for 83 after a preliminary reading of 82.5.

“Most of the economic data points suggest stronger growth going forward,” Eric Green, director of research and fund manager at Penn Capital Management, said by phone. The Philadelphia-based firm oversees about $7 billion. “This is a very good seasonal period of time for the markets.”

December Gains

The S&P 500 has gained 1.2% so far this month. December has been the second-best month for U.S. equity returns, according to data compiled by Bloomberg that starts in 1928. The average gain for the month is 1.5%, more than twice the overall monthly mean of 0.6%. The last December retreat for the S&P 500 was in 2007. U.S. equity exchanges will close early tomorrow, at 1 p.m., before the Christmas holiday.

Technology stocks jumped 1.4% as a group in the S&P 500 as Apple ended six years of negotiations, striking a deal that will give both the U.S. phone maker and China Mobile a means to fight declining share in the market of 1.2 billion wireless subscribers. China Mobile will sell the iPhone 5s and 5c models in its stores from Jan. 17, the companies said in a statement that provided no financial terms.

Facebook Inc. surged 4.5% as the company began trading as a member of the S&P 500 today. T-Mobile US Inc. rose 2.4% after people familiar with the situation said SoftBank Corp. Chief Executive Officer Masayoshi Son is exploring a deal for Sprint Corp. to buy the majority of the wireless-phone provider next year. Micron Technology Inc. slid 2.8% after Bank of America Corp. downgraded its rating.

Technology Rally

Today’s rally in technology shares helped the Nasdaq Composite surpass 4,120, a level that represents a recovery of 76.4% of the index’s decline during the bursting of the Internet bubble. The threshold is seen by Fibonacci analysts as the last obstacle for a full recovery. The benchmark gauge, which plunged 78% from its peak of 5,048.62, set on March 10, 2000, would need to climb about 22% to reclaim its record.

European stocks rose 3.7% last week, the biggest jump since April, after the Fed’s decision to reduce its monthly bond purchases increased investors’ confidence in the strength of the U.S. economic recovery. The Stoxx 600 rallied 16% this year, heading for its largest annual increase since 2009.

Shares in Europe are poised for a third year of gains in 2014, restoring almost all the losses suffered during the financial crisis, as economic growth overcomes record pessimism on earnings. Equities will rise 12% in 2014, the average projection of 18 forecasters tracked by Bloomberg News shows.

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