BLBG: U.S. Stocks Advance as Investors Await Manufacturing Data
U.S. stocks climbed, after the Standard & Poor’s 500 Index posted its first monthly loss since October, before a report that may show manufacturing rebounded last month from its largest contraction since 2009.
The S&P 500 rose 0.5 percent to 1,613.52 at 9:30 a.m. in New York.
“The U.S. market is very resilient,” said Tom Walker, head of U.S. equities at Martin Currie Investment Management Ltd., which manages 5.4 billion pounds ($8.2 billion), said by phone from Edinburgh. “It has been really strong in the first half of the year, and there’s scope for even more recovery from the weakness following Bernanke’s comments.”
The S&P 500 rallied 13 percent in the first half of the year, the best performance since a 17 percent gain in the first six months of 1998. The equity benchmark lost 1.5 percent in June, ending its longest streak of monthly gains since 2009. The gauge dropped 3.8 percent since May 21, the day before Fed Chairman Ben S. Bernanke signaled the central bank could scale back asset purchases if the economy improves in line with forecasts.
The Chicago Board Options Exchange Volatility Index, the measure of options on the S&P 500 known as the VIX, increased 33 percent last quarter, its biggest gain since the three months through September 2011. It has climbed 49 percent since hitting a six-year low in March.
A report at 10 a.m. New York time will probably show that U.S. manufacturing rebounded from its lowest level in almost four years. The Institute for Supply Management’s factory index rose to 50.5 in June from 49, according to the median estimate of economists surveyed by Bloomberg. A reading of more than 50 means that activity expanded.
A separate release from the Commerce Department at the same time may show that construction spending climbed for a second month in May.
In Japan, the quarterly Tankan index showed positive sentiment among large manufacturers for the first time in seven quarters. The measure rose to 4 in June from minus 8 in March, the Bank of Japan said. A positive figure means that optimists outnumber pessimists. Economists had predicted a reading of 3.
To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
