S&P 500 Gains to Record as Treasuries Fall; Crude Slips
Nw York I(nov 27) U.S. stocks rose, with the Standard & Poor’s 500 Index and the Dow Jones Industrial Average closing at records, as jobless claims unexpectedly fell and measures of consumer confidence beat estimates. Treasuries dropped while crude oil tumbled as a report showed U.S. supplies climbed.
The S&P 500 added 0.3 percent to 1,807.23 by 4:35 p.m. in New York and the Dow climbed 0.2 percent. The Nasdaq Composite Index extended gains beyond the 4,000 level to the highest close in 13 years. Treasuries fell for the first time in five days after a seven-year note sale attracted the least demand since 2009. Oil slid to an almost six-month low as U.S. inventories rose a 10th week. European stocks climbed while the yen weakened a fifth day versus the euro to a four-year low. Fewer Americans than projected filed applications for unemployment benefits last week, while the Thomson Reuters/University of Michigan index of consumer sentiment rose. A measure of German consumer confidence from Nuremberg-based GfK AG climbed to the highest level since August 2007. Chancellor Angela Merkel reached a coalition agreement with the Social Democrats, more than two months after the German leader’s Christian Democratic Union won national elections.
Today’s data “is in some sense a re-affirmation that things are going along pretty decently,” Bill Schultz, the chief investment officer at McQueen Ball & Associates in Bethlehem, Pennsylvania, where he oversees about $1.1 billion, said by phone. “Are we going to get higher rates again? Is tapering still out there? The market is playing with what’s going to come next and how we position going forward given a number of uncertainty still sitting out there.”
The S&P 500 has rallied 26.7 percent this year, putting it on track for its biggest annual gain since 1997, after the Fed continued the pace of its record monetary stimulus. The index is up 2.9 percent this month, with valuations near their highest level since the end of 2009. The S&P 500 trades for about 16.3 times member companies’ projected earnings, data compiled by Bloomberg show. U.S. equities and Treasury markets will be closed tomorrow for the Thanksgiving holiday.
U.S. jobless claims in the week ended Nov. 23 declined 10,000 to 316,000, the fewest in two months, the Labor Department said today in Washington. The index of U.S. leading indicators rose for a fourth straight month in October, reflecting gains in factory orders and applications to begin new-home construction. Other data showed the index of consumer sentiment in November unexpectedly rose to 75.1 from 73.2 a month earlier.
Bookings for American goods meant to last at least three years decreased 2 percent, matching the median forecast of economists surveyed by Bloomberg after a 4.1 percent gain in September that was larger than initially reported, the Commerce Department said.
Fed policy makers have been scrutinizing data to determine whether the U.S. economy is strong enough to withstand a reduction in their $85 billion a month of bond purchases. Three rounds of quantitative easing have helped push the S&P 500 up more than 166 percent from a bear-market low reached in 2009.
Four out of five investors expect the Fed to delay a decision to begin reducing the stimulus until March 2014 or later, according to a Nov. 19 Bloomberg Global Poll.