The Standard & Poor’s 500 Index (CME:SPM14) climbed to an all-time high as data showing increases in durable-goods orders and consumer confidence boosted optimism in the world’s largest economy. Emerging-market stocks retreated while gold (COMEX:GCM14) and grains declined.
The S&P 500 rose 0.4% to a record 1,908.82 at 10:07 a.m. in New York, and the Russell 2000 Index of smaller companies added 1%. The Stoxx Europe 600 index climbed 0.3%. The Morgan Stanley Capital International Emerging Markets Index lost 0.6% as Russia’s Micex dropped 2.5%. The yield on 10-year Treasuries increased 1 basis point to 2.55%. Portugal’s 10-year yield fell three basis points. Wheat (CBOT:WN14) declined 0.9% and corn (CBOT:CN14) slid 0.9%. Gold tumbled 1.3% to a three-week low.
U.S. durable goods orders rose for a third month in April, a sign factories will help the economy strengthen. Other data showed consumer confidence increased in May, while home prices in 20 U.S. cities rose at a slower pace in the year ended in March. European Central Bank President Mario Draghi signaled yesterday a readiness to act on low inflation, while China’s premier said he may fine-tune economic policy.
“We had some weak U.S. data due to the harsh winter and now everyone is expecting a recovery in spring and summer,” said Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion of assets.
Bookings for goods meant to last at least three years rose 0.8% after a 3.6% gain in the prior month that was stronger than previously reported, Commerce Department figures showed today in Washington. The median forecast of 68 economists surveyed by Bloomberg called for a 0.7% drop. Orders for military hardware surged by the most since December 2012.
The Conference Board’s index of U.S. consumer confidence increased to 83 in May from 81.7 a month earlier, the New York- based private research group said today. A Markit Economics preliminary index for services unexpectedly rose to 58.4 this month from 55.
The S&P/Case-Shiller index of property values increased 12.4% from March 2013, the smallest 12-month gain since July, after rising 12.9% in the year ended in February, a report from the group showed today in New York.
The S&P 500 rose 1.2% last week to a record amid better-than-estimated economic data, while the Russell 2000 Index of small companies increased 2.1%, ending a two- week slide.
The benchmark equities gauge is trading at 16.1 times the average projected earnings of its members, up from a multiple of 14.8 on Feb. 3, according to data compiled by Bloomberg. A gauge of U.S. equity volatility known as the VIX dropped 8.7% last week to 11.36, its lowest level since March 2013. The Chicago Board Options Exchange Volatility Index has retreated 47% from a 13-month high in February.
Traders are loading up on VIX call options as history shows there’s a good chance stock-market volatility is about to increase. Calls on the measure, which become more valuable during times of market stress, outnumbered ones betting on a decrease in market swings by 3.4-to-1 this month, the most since 2008, data compiled by Bloomberg show. The index has closed below 15 for the past 27 days. A study from Sundial Capital Research Inc. shows the gauge usually rises after reaching such low levels.
The value of equities worldwide climbed to a record $63.8 trillion yesterday, a public holiday in the U.S. and U.K.
The MSCI All-Country World Index climbed for a fifth day, gaining 0.2% to the highest level since November 2007. The MSCI AC Asia Pacific Index slipped less than 0.2% after gaining 0.4% yesterday for a third day of increases.