S&P 500 Index rises toward 5th quarterly gain

U.S. stocks climbed, with the Standard & Poor’s 500 Index (CME:SPM14) poised for a fifth straight quarterly gain, amid signs of tension easing in Ukraine and before a speech by Federal Reserve Chair Janet Yellen.

The S&P 500 gained 0.3 percent to 1,863.25 at 9:30 a.m. in New York. A quarterly advance would give the gauge its longest streak since 2007. The Dow Jones Industrial Average rose 32.17 points, or 0.2 percent, to 16,355.23.

“If there was any geopolitical risk, it’s calmed down and we’re showing some economic momentum,” James Paulsen, chief investment strategist at Wells Capital Management, which manages about $360 billion, said by phone. “You take that combo package and say, do I really want to be short going into this jobs number? People are looking through the windshield and saying it looks like the economic data is going to pick up without weather distortion.”

The S&P 500 fell 0.5 percent last week, trimming its gain in 2014 to 0.5 percent, as investors sold the bull market’s biggest winners to lock in gains as they assess how much of the recent economic weakness is weather-related and if the situation in Ukraine will worsen.

The Russell 2000 Index of smaller companies is down 1 percent this quarter, poised to snap a six-quarter streak of gains, the longest stretch since 1996. The Nasdaq Composite Index is down 0.5 percent in 2014 after losing 2.8 percent last week.

Rate Watch

Yellen said March 19 that the central bank’s monthly bond purchases could end this fall and benchmark interest rates may rise about six months later. The Fed chair speaks today at a conference in Chicago at 8:55 a.m. local time.

Fed Bank of Chicago President Charles Evans said March 28 that the central bank will probably increase interest rates in the second half of 2015.

Three rounds of central-bank bond purchases have helped the S&P 500 rally as much as 178 percent from its low in 2009.

“Yellen’s comments two weeks ago were taken with confusion, so she has an opportunity to calm things down today,” Veronika Pechlaner, who helps oversee $2.3 billion as investment manager at Jersey, Channel Islands-based Ashburton Ltd., said by phone. “Initially, her comments were seen as rather hawkish but it’s become clear since then from other members that that wasn’t the intention.”

A release at 9:45 a.m. in New York may show business activity decreased in March. The Institute for Supply Management-Chicago Inc.’s business barometer fell to 59.5 from 59.8 in February, according to economists surveyed by Bloomberg.

Diplomatic Solution

Separate reports this week may show that manufacturing in the world’s largest economy expanded further this month, while factory orders probably rebounded in February, according to economists’ forecasts in Bloomberg News surveys. The government’s monthly jobs report is scheduled for April 4.

Russia and the U.S. agree on the need for a diplomatic solution to tensions over Ukraine, Russian Foreign Minister Sergei Lavrov said yesterday.

U.S. Secretary of State John Kerry said Russia must pull forces back from Ukraine’s border as both sides seek a diplomatic solution, while Lavrov urged the government in Kiev consider devolving power to give Ukraine’s regions more autonomy. The two top diplomats met yesterday in Paris.

 

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