Stocks, Commodities Rise, Treasuries Drop on Economic Data
By Whitney Kisling and Matthew Brown
April 5 (Bloomberg) -- Stocks and commodities rose, while Treasuries retreated, as growth in American jobs and service industries boosted optimism the world’s largest economy is strengthening. Ten-year Treasury yields topped 4 percent for the first time since June.
The Standard & Poor’s 500 Index climbed 0.8 percent to 1,187.44 at 4:11 p.m. in New York, its biggest gain in a month and highest close since Sept. 26, 2008. The MSCI Asia Pacific Index topped its highest close in more than 19 months, driven by Japan. Oil and copper rose to at least 17-month highs, spurring a 1.1 percent gain in the Reuters/Jefferies CRB Index of commodities. The Dollar Index slipped 0.1 percent to 81.121 after sliding as much as 0.3 percent earlier.
U.S. payrolls gained last month by the most in three years, a “solid report” indicating “the economy is now creating jobs,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview. Industry reports today showed that pending home sales unexpectedly increased and the Institute for Supply Management’s index of service industries topped economists’ estimates.
“Everyone’s looking for signs that the economy is on solid footing,” said Keith Wirtz, who oversees $18 billion as chief investment officer at Fifth Third Asset Management Inc. in Cincinnati. “The ISM number or the jobs number or any other data point that comes out positive -- those are all going to be very well received by the markets.”
Markets in Europe, Australia, Hong Kong, China, Taiwan and New Zealand were shut for holidays.
Apple Inc. rose 1.1 percent to $238.49 after saying it sold more than 300,000 iPads on the device’s first day of availability over the weekend.
Energy Rally
Exxon Mobil Corp. and Chevron Corp. paced gains in 39 of 40 energy stocks in the S&P 500 as crude oil climbed as much as 2.4 percent to a 17-month intraday high of $86.90 a barrel in New York.
Oil prices have established a floor of $75 a barrel and there is no need for OPEC to increase production, Venezuelan Oil Minister Rafael Ramirez said April 2. The Organization of Petroleum Exporting Countries pumps about 40 percent of the world’s oil and slashed output in January 2009 to prevent a glut. The group left its production targets unchanged when ministers met in Vienna on March 17.
Venezuela, the group’s sixth-largest producer, is seeking a price band between $80 and $100 a barrel, Ramirez told reporters in Caracas on April 2.
Brazil’s Bovespa index of equities increased 0.2 percent as Petroleo Brasileiro advanced. Canada’s S&P/TSX Composite Index rose 0.3 percent as Suncor Energy Inc. rallied.
The MSCI Emerging Markets Index rallied 0.8 percent to the highest level since July 2008.
Copper, Hogs
Copper for May delivery advanced as much as 1.5 percent to $3.636 a pound in New York, the highest level in more than 20 months.
Hog futures rose, extending a rally to the highest price since in almost 13 years. Hog futures for June settlement gained 1.675 cents, or 2 percent, to 85.05 cents a pound on the Chicago Mercantile Exchange after touching 85.65 a pound, the highest for a most-active contract since May 1997.
A benchmark indicator of U.S. corporate credit risk fell to the lowest in more than two weeks. The Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, declined 1.5 basis point to a mid-price of 83.6 basis points as of 12:33 p.m. in New York, according to Markit Group Ltd. The index dropped to its lowest since March 17, when it was 82.5 basis points, CMA DataVision prices show.
‘Growth Optimism’
Shares of Canon Inc., which gets 28 percent of its revenue in the Americas, climbed 2.5 percent in Tokyo. Toyota Motor Corp., which derives 31 percent of its revenue in North America, increased 1.1 percent.
Former Federal Reserve chairman Alan Greenspan said yesterday on ABC’s “This Week” that the chances the U.S. economy will retrench after recovering from the worst recession since the 1930s “have fallen very significantly in the last two months.”
“There is increasing growth optimism now given that the job situation in the U.S. is getting a little more relaxed,” said Roger Groebli, Singapore-based head of financial-market analysis at LG Capital Management, part of the group that oversees $84 billion. “Exporters will benefit from that.”
Samsung, Hynix Climb
Samsung Electronics Co. rose 1.5 percent after Maeil Business Newspaper said the company will add a new semiconductor chip line. Asia’s biggest chipmaker also rose after the price of the benchmark DDR2 dynamic random access memory, or DRAM, chip rose on April 2, ending a four-day decline, according to Dramexchange Technology Inc. Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, advanced 3.4 percent.
Malaysia’s FTSE Bursa Malaysia KLCI Index rose 0.4 percent, advancing for a 10th day, the longest winning streak in almost 16 years. CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, climbed 1.1 percent to a record. The company said the size of its initial share sale for its dual listing on the Thai exchange has been raised to as much as 50 million shares from 35 million.
Indonesia’s benchmark stock index, Asia’s best-performing major market this year, climbed to a record on expectations the central bank will keep interest rates at a record low tomorrow, helping to boost the economy.
The Jakarta Composite index jumped 2 percent to 2,887.246, above its previous record close of 2,830.26 on Jan. 9, 2008. The measure has climbed 14 percent this year as the central bank raised its economic growth forecast and Standard & Poor’s upgraded the nation’s sovereign debt ratings.
Yen, Pound
The dollar fell the most against the Canadian and British currencies, losing 0.9 percent and 0.5 percent respectively.
The yen snapped four days of losses against the dollar, on speculation Japanese exporters bought the nation’s currency after it touched a seven-month low. The pound gained versus all major counterparts except the Canadian dollar after polls eased concerns that political turmoil will derail the nation’s economic recovery.
The pound rallied after a YouGov Plc poll for the Sunday Times showed that the opposition Conservative Party holds a 10 percent lead over Prime Minister Gordon Brown’s Labour party, before elections that are likely to be held next month. The Conservatives have 39 percent of the vote, while Labour had 29 percent and the Liberal Democrats 20 percent, the survey showed, reducing the likelihood that they will fail to win the parliamentary majority that some think is necessary to tackle the U.K.’s budget deficit, the largest in the Group of 20 nations. The pound strengthened 0.6 percent to $1.5293.
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