Advance in Stocks Stalls in U.S.; Commodities, Dollar Drop
March 12, 2010, 5:14 PM ESTBy Michael P. Regan and Rita Nazareth
March 12 (Bloomberg) -- Most U.S. stocks fell, halting a global advance, and commodities retreated as a drop in American consumer confidence overshadowed an unexpected increase in retail sales. The dollar weakened and 10-year Treasuries rose.
The Standard & Poor’s 500 Index slipped from a 17-month high, losing less than 0.1 percent to 1,149.99 at 4:24 p.m. in New York as 10 stocks declined for every nine that rose on the New York Stock Exchange and Nasdaq Stock Market. Oil lost 1.1 percent to $81.24 a barrel. The 10-year Treasury note yield decreased 3 basis point to 3.7 percent. The Dollar Index slid 0.7 percent to below 80 for the first time in more than a week.
The Reuters/University of Michigan preliminary consumer sentiment index fell to 72.5 in March from February’s final reading of 73.6. Economists in a Bloomberg survey projected the gauge would increase to 74. The unexpected drop spurred concern the economic rebound may slow as a weak job market continues to sap confidence.
“The glass may be half full, but people are not quite certain they can hold on to the glass,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages $18 billion. “The market is jittery. Every little piece of news will make people nervous or happy. On top of that, the excess debt situation throughout the developed markets is a big headwind. That will keep economic growth at a subpar level.”
Futures Hold Gains
The decline in the S&P 500 came even as sales at U.S. retailers unexpectedly increased 0.3 percent last month as shoppers braved blizzards to get to the malls. Futures on the S&P 500 expiring this month climbed 0.7 point to 1,151.3 today amid growing speculation the economic recovery will be sustained. Futures rose for an 11th day, the longest streak since they were created in 1982.
The S&P GSCI Index of commodities slipped 0.5 percent as gold, platinum and copper slipped in London.
The MSCI World Index of 23 developed nations’ stocks rose 0.4 percent, while the Stoxx Europe 600 Index advanced 0.3 percent.
South Africa’s Sasol Ltd. and Cnooc Ltd. of China climbed to help drive the MSCI emerging index higher. The Micex index in Russia, the world’s largest energy supplier, advanced 1.4 percent for the first gain in four days.
The MSCI Asia Pacific Index advanced 0.3 percent as Japan’s Nikkei 225 climbed 0.8 percent. Nissan Motor Co., which gets about 77 percent of its revenue outside Japan, increased 2.4 percent.
The dollar weakened against 14 of 16 major currencies. The pound strengthened 0.9 percent to $1.5204 after U.K. house prices increased in February at the fastest pace in more than seven years.
Greek Yields
The yield on the 10-year Greek bond, the country’s new benchmark, fell 10 basis points to 6.23 percent, while the two- year note yield lost 12 basis points to 4.79 percent. The yield premium investors demand to hold the 10-year security over German bunds declined 9 basis points to 306 basis points.
European Union finance ministers next week will discuss whether any Greek bailout should be funded by EU bonds guaranteed by euro region governments, said three people briefed on preparations for March 15-16 meetings.
Another option would be for governments in the 16-nation bloc to give Greece loans to help the country finance its budget deficit, said the people, who spoke on condition of anonymity because the talks are private. Any EU bond sale would have to be agreed upon by all 27 EU nations, they said. Euro region ministers meet in Brussels on March 15 and will be joined by the rest of the EU the next day.
Emerging-market and high-yield bond funds each took in more than $1 billion in the week to March 10, according to EPFR Global, a Cambridge, Massachusetts-based research company.
Investors have been net buyers for the past three weeks of bonds issued by Greece and other so-called peripheral European nations with widening deficits, including Spain, Portugal and Ireland, Citigroup Inc. said.
--With assistance from David Merritt, Matthew Brown, Anchalee Worrachate, John Fraher Stuart Wallace, Anna Rascouet, Michael Patterson, Anchalee Worrachate, Alexis Xydias and Paul Armstrong in London. Editor: Chris Nagi.
To contact the reporter for this story: Michael P. Regan in New York at mregan12@bloomberg.net.
To contact the editor responsible for this story: Chris Nagi at chrisnagi@bloomberg.net.
