By Michael P. Regan and Rita Nazareth
Dec. 29 (Bloomberg) -- U.S. stocks rose, rebounding from
yesterday’s drop, as data signaled the U.S. economy is weathering
Europe’s debt crisis. The euro erased an earlier loss and European
shares advanced.
The Standard & Poor’s 500 Index climbed 0.8
percent to 1,258.95 at 12:20 p.m. in New York, leaving it up 0.1 percent
for the year. The euro was little changed at $1.2941, after slumping as
much as 0.6 percent, and trimmed a 0.8 percent slide against the yen to
0.3 percent. Italy’s 10-year bond yield was up less than three basis
points at 7.03 percent after climbing 13 basis points earlier. Ten-year
U.S. Treasury rates were little changed at 1.91 percent.
U.S. equities extended gains after an index of
pending U.S. home sales rose more than economists forecast, while other
reports showed stronger-than-projected growth in business activity and a
drop in jobless claims over the past month to a three-year low.
European stocks fell earlier, while the euro touched a decade low
against the yen and a 15-month low versus the dollar, after Italy raised
less than its maximum target at a debt auction.
“There has been a much better tone in the U.S.,”
Richard Sichel, who oversees $1.6 billion as chief investment officer at
Philadelphia Trust Co., said in a telephone interview. “We’re
optimistic that corporate earnings can continue to be strong and that
will be a driver of the market.”
Financial stocks in the S&P 500 rose 1.4
percent as a group today to lead an advance in all 10 of the main
industries as Wells Fargo & Co., JPMorgan Chase & Co. and
Citigroup Inc. rallied at least 2 percent. The group of 80 banks,
insurers and investment firms has tumbled 18 percent this year for the
worst performance among the 10 industries.
Homebuilders Rally
PulteGroup Inc. and M/I Homes Inc. rose more than
4 percent to lead gains in all 12 companies in an S&P gauge of
homebuilders. The National Association of Realtors’ index of pending
home sales increased 7.3 percent to the highest level since April 2010.
Economists forecast a 1.5 percent gain, according to the median estimate
in a Bloomberg News survey.
The four-week moving average for jobless claims, a
less volatile measure than the weekly figures, dropped to 375,000 last
week, the lowest level since June 2008, Labor Department figures showed.
Applications rose for the first time in a month in the week ended Dec.
24, climbing by a more-than-forecast 15,000 to 381,000.
Other data showed business activity in the U.S.
expanded more than forecast in December, prompting companies to boost
employment. The Institute for Supply Management-Chicago Inc.’s business
barometer was 62.5. Readings above 50 signal growth. Economists forecast
the gauge would fall to 61, according to the median of estimates in a
survey.
Commodities Slip
The S&P GSCI Index of commodities retreated
0.3 percent as natural gas, cocoa and gold led losses among 17 of 24
commodities.
Gold futures fell as much as 2.6 percent to
$1,523.90 an ounce, the lowest price since July. Oil in New York lost
0.4 percent to $98.99 a barrel after falling 2 percent yesterday.
The Stoxx Europe 600 Index increased 0.9 percent
as real- estate firms, utilities and chemical companies led gains. The
Stoxx 600 has dropped 12 percent this year, compared with an 18 percent
slump in the MSCI Asia Pacific Index. The S&P 500 has drifted above
and below its 2010 closing level since the end of October.
The MSCI Emerging Markets Index was little
changed after falling for three straight day. Russia’s Micex rose 0.4
percent. Indian stocks dropped for a third day, with the Sensex sliding
1.2 percent. China’s Shanghai Composite Index advanced 0.2 percent, a
second straight day of gains that trimmed its yearly decline to 23
percent.
--With assistance from Shiyin Chen in Singapore, Mariko Ishikawa in
Tokyo, Paul Dobson, Claudia Carpenter, Ash Kumar and Andrew Rummer in
London and Robert Willis in Washington. Editors: Michael P. Regan, Jeff
Sutherland
To contact the reporters on this story: Rita Nazareth in Sao Paulo at
rnazareth@bloomberg.net;
Michael P. Regan in New York at
mregan12@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
