SF: Yen Gains, Oil Falls; S&P 500 Fluctuates Before Housing Report
July 26 (Bloomberg) -- The yen strengthened and oil retreated as concern global economic growth is slowing overshadowed FedEx Corp.'s higher profit forecast. U.S. stocks swung between gains and losses before a report on home sales.
The yen appreciated against 12 of its 16 most-traded counterparts, and oil dropped 0.3 percent at 9:45 a.m. New York time. The Standard & Poor's 500 Index climbed as much as 0.2 percent and retreated up to 0.1 percent while the Stoxx Europe 600 Index declined 0.2 percent as a selloff in drugmakers overshadowed results of bank stress tests that showed the majority of the region's lenders have enough capital.
Global growth may average 3.25 percent to 3.5 percent in the next three to five years, less than the 4.7 percent pace of the five years leading up to the 2008 slump, according to Stephen Roach, non-executive chairman of Morgan Stanley Asia. Stocks initially rallied and Treasuries fell after package- delivery company FedEx joined larger rival United Parcel Service Inc. in raising its earnings projection.
"There is more clarity in Europe, but that doesn't clear up the other problems," said Peter Chatwell, a strategist at Credit Agricole Corporate & Investment Bank in London. "There are still economic concerns and fears of a double-dip recession and that's the main worry now. We still have a very pessimistic market and that will take some time to pass."
Sales of new U.S. homes rose in June to the second-lowest level on record, indicating the industry that sparked the recession is having difficulty sustaining a recovery following the end of a government tax credit, economists said before a report today at 10 a.m. New York time.
Purchases climbed 3.7 percent to a 311,000 annual pace last month, according to the median estimate of 60 economists surveyed by Bloomberg News. The rate would be second only to May's 300,000 as the lowest since data began in 1963.
--With assistance from Paul Armstrong, Claudia Carpenter, Kate Haywood, Andrew Rummer, Daniel Tilles and Rob Verdonck in London. Editors: Nick Baker
