US stocks rose, with the Standard & Poor’s 500 Index rebounding from its worst drop in five weeks, as House Speaker John Boehner said he expects to keep working on a budget plan with President Barack Obama. Treasuries erased earlier gains and commodities trimmed losses.
The Standard & Poor’s 500 Index rose 0.3 per cent to 1,440.61 at 2:26 p.m. in New York after slipping 0.8 per cent from a two-month high yesterday. Europe’s benchmark stock index closed little changed. The S&P GSCI Index of commodities was down less than 0.2 per cent after losing 0.6 per cent earlier. Gold slumped to the lowest since August as quickening US economic growth damped speculation of further monetary stimulus.
Ten-year Treasury yields were little changed at 1.8 per cent.
Boehner’s remarks helped equities rebound after the S&P 500 fell as much as 0.2 per cent earlier on signs budget talks were deteriorating. Concerns about the negotiations overshadowed government data showing the economy grew 3.1 per cent last quarter, more than previously estimated and exceeding the forecasts of economists in a Bloomberg poll.
“The market continues to be driven by the state of the fiscal-cliff negotiations,” said Peter Jankovskis, who helps oversee $US3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. He spoke in a telephone interview. “That’s what people are keeping an eye on and that’s what is causing the swings in the market.”
Among US stocks, NYSE Euronext surged a record 34 per cent after IntercontinentalExchange Inc., the 12-year-old energy and commodity futures bourse, agreed to acquire the owner of the New York Stock Exchange for cash and stock worth $US8.2 billion, moving to take control of the world’s biggest equities market.
Gauges of financial, telephone and consumer-staples companies rose at least 0.4 per cent to lead gains in all 10 of the main industry groups in the S&P 500. Bank of America Corp., JPMorgan Chase & Co. and UnitedHealth Group Inc. rose more than 1.6 per cent for the biggest gains in the Dow Jones Industrial Average.
The Stoxx Europe 600 Index was little changed after closing at a 19-month high yesterday. SBM Offshore NV soared 19 per cent, the most in at least 23 years, after seeking to settle a dispute with Talisman Energy Inc. Ericsson AB lost 1.8 per cent after taking an 8 billion-krona ($US1.2 billion) charge related to its wireless-chip venture with STMicroelectronics NV. UBS AG, Switzerland’s biggest bank, dropped 1.1 per cent as it faces scrutiny in Hong Kong for possible misconduct linked to the city’s interbank rates.
Silver, soybeans, wheat and copper lost at least 2 per cent to lead declines in 18 of 24 commodities tracked by the S&P GSCI. New York-traded crude oil increased 0.7 per cent to $US90.16 a barrel after earlier losing 0.3 per cent earlier. Gold futures lost 1.2 per cent to $US1,647.00 an ounce.
The euro was up 0.1 per cent at $US1.3240, near an eight-month high. Europe’s shared currency reached $US1.3308 yesterday, the strongest since April. The dollar weakened against 10 of 16 major peers, losing the most versus the Swedish krona and Brazilian real.
The MSCI Emerging Markets Index fell 0.1 per cent to 1,051.99, snapping a two-day rally, as benchmark gauges in Argentina and Russia led gains while stocks in Taiwan and Colombia retreated. The gauge of developing markets has gained 15 per cent this year.
The yen strengthened against most major peers as the Bank of Japan maintained its inflation goal at 1 per cent after newly elected Prime Minister Shinzo Abe called for a doubling of the target. Japan’s central bank expanded its asset purchase funds to 76 trillion yen from 66 trillion yen, and kept its credit- lending program at 25 trillion yen.
“There had been an expectation that the BOJ would maybe do more,” said Melinda Burgess, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “There was a bit of market disappointment that they didn’t deliver as much as we were expecting. We’re seeing a bit of a selloff today on worries US negotiations aren’t going as smoothly as we would have hoped.”
The yen has tumbled 13 per cent this year, the worst performer among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has weakened 3.5 per cent and the euro has dropped 1 per cent.