LIV: S&P 500 tops record close as emerging markets gain, dollar drops
London/New York: The Standard & Poor’s 500 Index climbed above its closing record amid optimism in the strength of the world’s largest economy. Emerging-market equities rose, led by the biggest gain in five weeks for Hong Kong-listed Chinese shares, and the dollar weakened.
The Standard & Poor’s 500 Index gained 0.4% at 9:32 am in New York, topping a closing high reached on 7 March. The MSCI Emerging Markets Index gained 0.3% as Hong Kong’s Hang Seng China Enterprises Index climbed 2.4% after entering a bear market on Thursday. Moscow’s Micex Index lost 2.2% as the European Union (EU) followed the US in intensifying sanctions against Russia. The yield on 10-year treasuries was little changed at 2.77%. Gold rose 0.6%.
The US equities have advanced this week as better-than-estimated economic data has overshadowed concern that benchmark interest rates may rise in the middle of next year. The EU extended the list of prominent Russians subject to sanctions for their part in the annexation of Crimea, while Fitch Ratings Ltd. revised its outlook for the country’s debt to negative.
“Sentiment is positive and the general expectation is that the US economic growth is OK,” Henrik Drusebjerg, who helps oversee $220 billion as a senior strategist at Nordea Bank AB in Copenhagen, said in a phone interview. “The level of growth is still the main thing that investors are concerned about.”
The S&P 500 rose 0.6% on Thursday as reports on leading indicators and regional manufacturing topped forecasts. The index lost 0.6% and treasury yields jumped the previous day after Federal Reserve chair Janet Yellen said the central bank’s stimulus programme could end this fall and the rates could rise about six months later.
Fed Stimulus
Three rounds of Fed stimulus and low interest rates have helped boost the equity gauge as much as 178% from a 12- year low as the US stocks enter the sixth year of a bull market. Policy makers met this week as economic reports indicated the economy is pulling out of a slowdown linked to unusually harsh winter weather.
“The consensus believes that the stock market will continue moving higher as long as the economy improves,” Matt Maley, an equity strategist with Miller Tabak & Co., said in a phone interview from Boston. “But whether that’s enough to keep it rallying is another thing entirely.”
Stock trading may be subject to unexpected swings on Friday because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire.
Symantec Corp. slumped 11% on Friday after the maker of anti-virus software fired its chief executive officer. Nike Inc. slid 3.1% after the world’s largest sporting-goods manufacturer forecast that sales will climb at a slower pace than analysts had predicted.
Emerging Markets
Developing-market equities headed for a weekly gain of 0.7%, paring their losses this year to 5.9%. The benchmark trades at a price-to-book ratio of 1.4, its cheapest level versus the MSCI World Index since 2004.
Chinese shares rallied amid speculation the government is loosening funding restrictions for property developers and banks to support growth. The Shanghai Composite Index climbed 2.7%, its biggest gain in four months.
The WIG 30 Index in Poland increased 0.3%. Natural-gas producer OAO Novatek paced losses on Russia’s Micex.
European Equities
Commodity producers led gains on the Stoxx 600 after the Wall Street Journal reported that workers at Anglo American Plc’s South African platinum business have agreed to stop their strike and return to work. The mining company rose 1.3%.
The Bloomberg Dollar Spot Index, which monitors the US currency against its 10 major counterparts, retreated 0.1%. It has climbed 0.7% since 14 March, its biggest weekly advance since 17 January.
The Australian dollar rose against 15 of its 16 major peers on speculation the country’s growth will defy a slowdown in China. It strengthened 0.4% to 90.72 US cents on Friday.
Gold advanced 0.7% to $1,339.70 an ounce, its first gain this week. Lean hogs rose 1.2% as a pig virus is helping to constrain the US supplies, raising pork costs. Bloomberg
