Stocks Rally, Euro Strengthens; Oil Advances
The euro strengthened as the Greek government prepared to face a confidence vote that may determine whether it avoids a default. Photographer: Chris Ratcliffe/Bloomberg
June 21 (Bloomberg) -- Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks about investing in equities versus bonds and the Greek debt crisis. Gross speaks with Tom Keene and Ken Prewitt on Bloomberg Radio's "Surveillance." (This is an excerpt. Source: Bloomberg)
June 21 (Bloomberg) -- Stephen Wood, chief market strategist for Russell Investments, talks about Greece's debt crisis and the outlook for global markets. Wood speaks from New York with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
June 20 (Bloomberg) -- Bloomberg's Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks rallied, sending the Standard & Poor’s 500 Index up for a third straight day, as Luxembourg’s Jean-Claude Juncker assured investors that a solution will be found to Greece’s debt crisis. Bloomberg's Pimm Fox also speaks. (Source: Bloomberg)
June 21 (Bloomberg) -- Stefan Keitel, chief investment officer at Credit Suisse Asset Management, talks about today's confidence vote faced by Greek Prime Minister George Papandreou and the outlook for the European debt crisis. Keitel, speaking with Erik Schatzker on Bloomberg Television's "InsideTrack," also discusses investment strategy. (Source: Bloomberg)
Jean-Claude Juncker, head of the Eurogroup and Luxembourg's prime minister. Photographer: Jock Fistick/Bloomberg
Stocks gained, with U.S. equities rising for a fourth day and European shares rebounding from a three-month low, and the euro strengthened as the Greek government prepared for a confidence vote that may determine its financial future. Oil rose and Treasuries retreated.
The Standard & Poor’s 500 Index increased 0.8 percent to 1,288.6 and the Stoxx Europe 600 Index climbed 1 percent at 10:18 a.m. in New York. The euro strengthened 0.4 percent to $1.4363, while the Dollar Index fell 0.4 percent. Costs to protect European sovereign debt slid as Greek and Spanish bonds rallied. Corn, cocoa and zinc climbed at least 1.8 percent to lead gains in 21 of 24 materials in the S&P GSCI Index, which halted a four-day slump. Ten-year U.S. Treasury note yields gained for a third day, up three basis points at 2.99 percent.
Today’s vote of confidence in Prime Minister George Papandreou is likely to determine how soon the nation can win international aid to shore up its finances. Investors also awaited a statement from the Federal Reserve tomorrow for clues about the outlook for interest rates and stimulus efforts.
“Market says Papandreou will be victorious,” Peter Boockvar, equity strategist at Miller Tabak & Co., wrote in a note to investors. “While there are no ‘4 more years’ chants in Greece, we all hope that George Papandreou gets a thumbs up tonight within the Greek government to continue on with the budget cuts that must be followed in order for the country to avoid an outright default.”
Eight Groups Higher
Gains in the S&P 500 were led by commodity producers, industrial companies and technology firms, with eight of 10 groups higher.
All 12 shares in an S&P gauge of U.S. homebuilders advanced. Purchases of existing homes fell 3.8 percent to a 4.81 million annual pace last month, in line with the 4.8 million median estimate in a Bloomberg News survey of economists, data from the National Association of Realtors showed today. The median sales price declined from a year earlier and 31 percent of transactions were of distressed dwellings.
The S&P 500 has rebounded for four straight days after a six-week slump brought it within half a point of erasing its 2011 gain on June 16 and made it the cheapest in almost a year compared with forecast earnings. The four-day advance has left the index up 2 percent for the year.
The Stoxx 600 gained the most in a week after the gauge’s valuation compared with its companies’ reported earnings dropped to the cheapest since 2008 yesterday. Petropavlovsk Plc, a producer of gold in Russia, and Whitbread Plc, the U.K. hotel and restaurant operator, jumped more than 6 percent in London after reporting increased sales. SABMiller Plc (SAB) fell 3.3 percent as Foster’s Group Ltd. (FGL) rejected its A$9.5 billion ($10 billion) takeover offer as too low.
Euro, Dollar, Aussie
The euro appreciated 0.4 percent versus the yen, climbing for the second consecutive day. The dollar weakened against all of its 16 major currencies tracked by Bloomberg. The Australian dollar fell versus all but two of its major peers after the nation’s central bank said in minutes of this month’s meeting that it is “prudent” to keep interest rates unchanged.
The yield on the 10-year Greek bond fell 31 basis points to 17.03 percent, while the Irish yield declined five basis points. Default swaps on Greece dropped 118 basis points to 1,883, while Ireland’s were down 26 basis points at 735 and Portugal’s fell 14 to 754 basis points, according to CMA.
‘Come Back to the Markets’
Luxembourg Prime Minister Jean-Claude Juncker said yesterday the Greek leader pledged to do everything to enact austerity measures. Europe’s future rescue facility won’t have preferred creditor status for Greece, Ireland and Portugal, the three countries already in official aid programs, Juncker said yesterday. “This should make things easier for those countries to come back to the markets,” he said.
“The whole market is oversold and hence the bounce on a hint that one of the issues weighing on the market may be close to a resolution,” said Prasad Patkar, a money manager who helps oversee about $1.7 billion at Platypus Asset Management Ltd. in Sydney. “Greece is arguably the biggest of these issues because of its ability to cause severe damage to markets.”
Spanish 10-year bonds rose, driving the extra yield investors demand to hold the securities instead of benchmark German bunds nine basis points lower, after Spain sold about 3 billion euros of three- and six-month bills even as yields rose. Greek borrowing costs increased at its offering of 1.625 billion euros of 13-week bills.
The S&P GSCI index of 24 commodities jumped 0.3 percent, the first gain in five days, as oil climbed 51 cents to $93.77 a barrel in New York. Corn increased 1.9 percent on speculation rains may flood crops in China.
Emerging Markets
The MSCI Emerging Markets Index rose 1.2 percent, snapping a four-day decline. South Korea’s Kospi Index (KOSPI) increased 1.4 percent, led by banks, after Daewoo Securities Co. said the nation’s loan growth may improve. China’s Shanghai Composite Index gained 1 percent, climbing from a nine-month low. Turkey’s ISE National 100 Index (XU100) rose 1.3 percent.
The Dubai Financial Market General Index added 0.4 percent after Joe Kawkabani, Franklin Templeton Investments (ME) Ltd.’s chief investment officer of equities in Dubai, said the United Arab Emirates’ improved securities settlement system may help MSCI Inc. (MSCI) boost the nation to emerging-market status. The Abu Dhabi Securities General Market Index fell 0.9 percent.
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