Stocks can't hold gains; is it the weather?

Midday update

Forint Slides

Hungary’s forint weakened 0.8 percent against the euro, extending a two-day drop to 1.5 percent. The central bank yesterday lowered its key rate more than economists predicted. The ruble slid 0.6 percent versus the dollar. Russia canceled a bond auction for the third time in less than a month as the ruble declined and yields climbed.

The Polish zloty lost 0.5 percent per euro and South Africa’s rand slid 0.5 percent versus the dollar. The Thai baht capped its biggest two-day loss in two months.

A Bloomberg gauge of 20 developing-nation currencies fell for a second day, losing 0.3 percent. The MSCI Emerging Markets Index of stocks dropped 0.2 percent.

The S&P 500 erased gains after approaching its all-time closing high reached last month of 1,848.38. Three rounds of central bank stimulus have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.

Fed Minutes

The Fed releases the minutes of its Jan. 28-29 meeting at 2 p.m. in Washington. At the meeting, the last under former Chairman Ben S. Bernanke, policy makers reduced the bank’s monthly asset purchases by $10 billion to $65 billion, citing improved economic growth.

Housing starts fell to an 888,000 annualized rate following December’s revised 1.05 million, the Commerce Department reported today in Washington. The decrease was the biggest since February 2011. The median estimate of 84 economists surveyed by Bloomberg called for 950,000.

Investors have dismissed weaker-than-forecast economic data including January’s payrolls over the past two weeks, helping stocks recover from their worst start of a year since 2010. The S&P 500 had slumped as much as 5.8 percent since reaching a record on Jan. 15 as concern over Fed tapering fueled an exodus in emerging markets. The index has since climbed 5.9 percent, paring its 2014 loss to 0.2 percent.

Earnings Season

Nabors Industries Ltd., CF Industries Holdings Inc. and Garmin Ltd. jumped at least 6.6 percent to lead gains in the S&P 500 after earnings beat analysts’ estimates. Eli Lilly & Co. climbed 3.4 percent after reporting positive test results on a lung cancer drug.

About 75 percent of S&P 500 companies that have posted results for the fourth quarter have beaten estimates for profit and 64 percent have exceeded sales projections, according to data compiled by Bloomberg.

Hedge-fund manager David Einhorn cautioned against betting on the extension of a U.S. stock-market rally that he said was fueled by conditions that are difficult to sustain.

“In 2013, the market rewarded many companies for beating earnings after they had lowered guidance,” Einhorn said today on a conference call discussing results at Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where he is chairman. “This trend is not likely to continue indefinitely.”

The S&P 500 trades at 17 times reported operating earnings, near the highest level since 2010, according to data compiled by Bloomberg. The ratio increased about 20 percent in 2013, the biggest jump in four years, while corporate profits rose 5.6 percent. The S&P 500 rallied 30 percent last year.

European stocks erased declines of as much as 0.6 percent in the final 90 minutes of trading. Trading volumes in Europe’s Stoxx 600 were 18 percent less than the 30-day average, according to data compiled by Bloomberg.

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