Thursday, 07 May, 2015

U.S. Stocks Gain Amid Tech Rally; Dollar Rises With Treasuries

(Bloomberg) — U.S. stocks climbed as Microsoft Corp. and Yahoo! Inc. led technology shares higher. The dollar rose for the first time in three days and Treasuries halted a weeklong slide before a labor report Friday that may clarify whether a first-quarter economic slowdown was temporary. The Standard & Poor’s 500 Index added 0.4 percent at 12:05 p.m. in New York. Microsoft rebounded from its steepest drop in six weeks, while Yahoo surged 4.7 percent. The Stoxx Europe 600 Index closed higher for the first time in three days after. The Bloomberg Dollar Spot Index rose 0.5 percent. The yield on 10-year Treasuries fell three basis points to 2.21 percent. The S&P 500 rose from a one-month low, the Bloomberg dollar gauge rebounded from its weakest level since Feb. 5 and Treasuries turned positive after a rout that erased more than $400 billion from global bonds in two weeks. Federal Reserve policy makers are watching hiring data to determine the timing of borrowing costs after economic growth slowed in the first quarter for reasons the central bank called “transitory.” “We’re seeing a rebound off some selling that took place recently,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said by phone. “The next trend will be set by whatever the employment numbers dictate tomorrow.” Global Debt Global equities have retreated amid a selloff in government debt sparked by record-low yields in Germany that money managers have said appear unsustainable. At the same time, China’s economy has slowed, leading to the biggest three-day slide in the country’s stocks since June 2013, while a 51 percent rally in Brent crude since mid-January is adding to signs of inflation. U.S. oil slipped below $60 a barrel on Thursday, while Brent slid 2 percent to $66.44 in London. The latest data on applications for unemployment benefits showed jobless claims last week held near the lowest in 15 years. A report Wednesday showed U.S. companies added the fewest workers in more than a year last month. Economic data have been missing estimates by the most in more than six years, stoking concerns growth is slowing into the second quarter. “The market has been getting mixed to negative messages over the last few days,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said by phone. “The market has had a more negative tone lately. It makes tomorrow’s jobs number even more newsworthy than usual. You can’t dismiss the international factors out there.” Alibaba, Utilities Among U.S. stocks moving Thursday, Alibaba Group Holding Inc. jumped 7.3 percent after reporting a 45 percent increase in quarterly revenue. Yahoo owns a stake in the Chinese e-commerce company. Microsoft climbed 1.3 percent. Exxon Mobil Corp. slipped 1.1 percent as oil fell. Utility shares rebounded from a two-day rout as Treasury yields slipped. European bonds diverged after a uniform rout to start the month. Italian and Spanish government bonds advanced, while German and French debt continued to retreat. Italy’s 10-year bond yield fell 15 basis points to 1.77 percent, while similar-maturity Spanish bond rates dropped 17 basis points to 1.73 percent. Germany’s 10-year bund yield, the euro area’s benchmark sovereign securities, rose to the highest since December. The euro fell from a more than two-month high versus the dollar as the turmoil in European debt markets eased. The 19-nation shared currency weakened 0.5 percent to $1.1286, after touching $1.1347, the highest level since Feb. 23. The dollar slipped 0.1 percent to 119.35 yen, the fourth consecutive decline. “We’re seeing some consolidation after some pretty powerful moves over the past two weeks,” Mike Moran, a senior strategist in New York at Standard Chartered Plc, said by phone. “Payrolls will be a very important number. It’ll really give us a much clearer read on the strongest part of the U.S. economy, which is undoubtedly the labor market.” Greece, China European stocks were little changed after erasing a decline of as much as 1.8 percent as a gauge of technology stocks and German equities reversed losses. The Stoxx 600 has fallen 6 percent from a record in April, when valuations were at the highest in at least a decade. Greece’s ASE Index climbed 2.5 percent, with Piraeus Bank SA and Attica Bank jumping more than 10 percent. Benchmark stock indexes of Spain, Portugal and France fell 1 percent. The MSCI Emerging Markets Index slid 1.6 percent, poised for the lowest close since April 8. The rupee and baht fell at least 1 percent and Indonesia’s rupiah lost 0.9. A gauge of 20 emerging-market currencies declined for the first time in three days, dropping 0.3 percent. The Shanghai Composite lost 2.8 percent, extending a three-day decline to 8.2 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slipped 1.6 percent. Morgan Stanley downgraded Chinese stocks for the first time in more than seven years on Thursday, citing the weakest corporate profits since 2009. Trade data on Friday may show China’s imports declined for a sixth straight month in April. Precious metals retreated, with gold losing 0.7 percent to $1,183.87 an ounce in London. Silver slid 1.5 percent. Brent rose 0.5 percent to $68.13 a barrel in London. Disclaimer The information contained in this communication from the sender is confidential. It is intended solely for use by the recipient and others authorized to receive it. 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