S&P 500 nears record early Friday

U.S. stocks rose, with the Standard & Poor’s 500 Index(CME:SPM14) touching a record, amid optimism in the strength of the world’s largest economy. Emerging-market equities rose, led by the biggest gain in five weeks for Hong Kong-listed Chinese shares, and the dollar weakened.

The S&P 500 rose 0.5 percent to 1,880.60 at 11:52 a.m. in New York, after reaching an all-time intraday high. The MSCI Emerging Markets Index gained 0.6 percent as Hong Kong’s Hang Seng China Enterprises Index climbed 2.4 percent after entering a bear market yesterday. Moscow’s Micex Index lost 1 percent. The dollar weakened 0.1 percent against the euro. The yield on 10-year Treasuries fell one basis point to 2.76 percent. Gold and copper advanced with oil.

U.S. equities have advanced 2 percent this week as better- than-estimated economic data has overshadowed concern that benchmark interest rates may rise in the middle of next year. The European Union extended the list of prominent Russians subject to sanctions for their part in the annexation of Crimea, while Fitch Ratings Ltd. revised its outlook for the country’s debt to negative.

“We saw a group of reports on Thursday that were pretty strong overall, and those signs of economic strength have carried over into today,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said in a phone interview. “Perhaps there’s some pent-up demand that is going to translate into improvement with the economic reports coming next week.”

The S&P 500 rose 0.6 percent yesterday as reports on leading indicators and regional manufacturing topped forecasts. Reports on housing, gross domestic product and durable goods are among the economic data due next week. The index lost 0.6 percent and Treasury yields jumped the previous day after Federal Reserve Chair Janet Yellen said the central bank’s stimulus program could end this fall and the rates could rise about six months later.

Fed Stimulus

Three rounds of Fed stimulus and low interest rates have helped boost the equity gauge as much as 178 percent from a 12- year low as U.S. stocks enter the sixth year of a bull market. Policy makers met this week as economic reports indicated the economy is pulling out of a slowdown linked to unusually harsh winter weather.

“The consensus believes that the stock market will continue moving higher as long as the economy improves,” Matt Maley, an equity strategist with Miller Tabak & Co., said in a phone interview from Boston. “But whether that’s enough to keep it rallying is another thing entirely.”

Stock trading may be subject to unexpected swings today because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire.

Page 1 of 2 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome