Dec. 27 (Bloomberg) -- U.S. stocks were little changed, with the Standard & Poor’s 500 Index poised for the biggest fourth-quarter rally since 1999, while oil gained as higher- than-estimated consumer confidence helped offset concern about a drop in American home prices. Copper and gold declined.
The S&P 500 rose less than 0.1 percent to 1,265.43 at 4 p.m. New York time, and the Dow Jones Industrial Average fell 2.65 points to 12,291.35. Both are among the 10 best performers in 2011 among 91 national indexes tracked by Bloomberg, and the S&P 500 has surged 12 percent this quarter. Crude jumped 1.7 percent after Iran threatened to block transportation through the Straight of Hormuz. Copper lost 1.7 percent, and gold fell 0.7 percent.
The Conference Board’s measure of consumer sentiment topped the median economist projection and climbed to the highest level in eight months, adding to evidence that the U.S. economy is improving. The S&P 500 erased its 2011 loss last week after the fewest Americans since 2008 filed first-time claims for unemployment benefits. Data earlier today showed home prices in 20 U.S. cities dropped more than economists predicted.
“Confirmation of gradual improvement of the U.S. economy bodes well for the global market,” Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus & Co., which oversees more than $107 billion in client assets, said in a telephone interview. “Still, the persistent fragility within the global sovereign debt market will continue to create uncertainty among investors.”
Trading volume for S&P 500 companies was 54 percent less than the 180-day average, data compiled by Bloomberg show. The stock index moved 0.56 percent between its lowest and highest points of the day, the narrowest range since July.
Italian 10-year government bonds erased losses before an auction, with yields at 7 percent compared with 7.14 percent earlier in the day. The nation is preparing to auction as much as 20 billion euros ($26.2 billion) of debt in the next two days. German debt rose, pushing the rate on two-year notes to less than 0.2 percent for the first time since Bloomberg began collecting the data in 1990, after International Monetary Fund Managing Director Christine Lagarde said the world economy is in danger because of Europe’s financial crisis.
In U.S. stock trading, Sears Holdings Corp. tumbled 27 percent after the retailer said it will close as many as 120 stores to cut costs amid declining sales. Mead Johnson Nutrition Co. rose 5.8 percent after the world’s leading seller of children’s formula said tests showed no bacteria in a batch of the product used by a baby who died.
The S&P 500 probably will retreat to near its 2011 low, or about 15 percent, in the first half of next year before rallying in the second half, Bank of America Corp.’s Mary Ann Bartels said. The benchmark gauge for U.S. stocks is likely to test the intraday low of 1,074.77 it reached in October, said Bartels, the New York-based head of technical and market analysis at the firm, in an interview today on Bloomberg Television’s “Inside Track” with Scarlet Fu and Sara Eisen.
Oil increased for a sixth day, the longest stretch in 13 months, as Iran threatened to block transportation through the Strait of Hormuz and consumer confidence beat estimates.
Crude advanced as much as 1.9 percent after Iran’s official Islamic Republic News Agency cited Vice President Mohammad Reza Rahimi as saying the country would bar shipments through the strait if sanctions are imposed on its oil exports.
Treasury 10-year note yields dropped from almost the highest level in two weeks, slipping to 2 percent. America’s government debt securities were headed for their best annual return since 2008 on concern Europe’s sovereign-debt turmoil will slow global economic growth. Yields erased their decrease briefly today after the report on consumer confidence.
The euro traded at almost its lowest level since January against the dollar as concern lingered that Europe’s debt crisis will slow regional economic growth. The 17-nation currency fluctuated before Italy sells bills and bonds tomorrow. The Swiss franc and the yen also appreciated against the dollar as U.S. consumer confidence beat forecasts.
The euro was little changed at $1.3069. It dropped to $1.2946 on Dec. 14, the lowest level since Jan. 11. The common currency weakened 0.1 percent to 101.76 yen. The dollar fell 0.1 percent to 77.87 yen.
--With assistance from Scarlet Fu, Inyoung Hwang, Catarina Saraiva and Mark Shenk in New York. Editors: Jeff Sutherland, Nick Baker
To contact the reporters on this story: Nick Baker in New York at firstname.lastname@example.org; Rita Nazareth in Sao Paulo at email@example.com
To contact the editor responsible for this story: Nick Baker at firstname.lastname@example.org