U.S. stocks rose, driving the Standard & Poor’s 500 Index to the best weekly gain of the year, while the euro fell as investors awaited weekend talks among European finance officials for news of a potential bailout of Spain. Oil trimmed an early drop and Treasuries pared gains.
The Standard & Poor’s 500 Index advanced 0.8 percent to 1,325.66 at 4 p.m. New York time, extending its rally this week to 3.7 percent. It had fallen as much as 0.6 percent today. Oil recovered most of a 3.3 percent plunge and the S&P GSCI gauge of 24 commodities slipped 0.7 percent after sinking as much as 2.4 percent. The euro weakened 0.5 percent to $1.25 after Spain’s credit ranking was cut three steps by Fitch Ratings yesterday. The 10-year Treasury yield lost less than one basis point to 1.63 percent after declining as much as eight points.
Spain is poised to become the fourth of the 17 euro-area countries to require emergency assistance as the currency bloc’s finance chiefs plan weekend talks on a potential aid request to shore up the nation’s lenders. German exports dropped in April for the first time this year and industrial output in Italy fell more than economists estimated, reports showed today. Global stocks rallied this week as speculation mounted that policy makers will act to spur growth.
“The risk-on trade emerged,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. “There’s more of a conviction that something is going to happen with Spanish banks that’s going to be positive. Anything that could address the situation in a favorable way could have a positive impact.”
Wal-Mart Stores Inc., JPMorgan Chase & Co. and Home Depot Inc. rose more than 2 percent to lead gains in the Dow Jones Industrial Average, which rallied 93.24 points to 12,554.20. Facebook Inc., which this week fell to the lowest price since it went public, advanced 3 percent. Alpha Natural Resources Inc. slumped 2.6 percent as the nation’s second-biggest coal producer said it will shut mines in Kentucky and closing U.S. regional offices.
Stocks reversed an early rally yesterday after Federal Reserve Chairman Ben. S. Bernanke said the Fed will need to assess conditions before deciding if more measures are required to stoke an economy threatened by Europe’s debt crisis and U.S. budget cuts.
Treasury 30-year bond yields reversed a retreat of as much as nine basis points, ending little changed at 2.74 percent. The 10-year note’s yield increased 18 basis points this week, the most since March. After markets closed in New York, S&P affirmed the U.S. credit rating and maintained a negative outlook, reflecting the company’s opinion that political and fiscal credit risks could build to the point of lowering the AA+ long- term rating by 2014.
The Stoxx Europe 600 Index slipped 0.3 percent, after falling as much as 1.4 percent. A gauge raw-material producers slumped 2.8 percent for the biggest decline among 19 groups. BHP Billiton Ltd., the world’s biggest mining company, slid 2.9 percent and Rio Tinto Group retreated 4.8 percent. The regional benchmark rose 2.9 percent in the week, its biggest gain since February.
Barclays Plc decreased 1.3 percent as the Financial Times reported that Chief Executive Officer Bob Diamond has postponed his goal of reaching a 13 percent return on equity by 2013. The newspaper cited unidentified people close to the bank. Lamprell Plc, an oil and gas rig engineer, slumped 22 percent after cutting its profit outlook for the second time in a month.
The euro, which depreciated 0.6 percent versus the yen, was set for its first weekly gain against the dollar in six. The Dollar Index, which tracks the U.S. currency against those of six trading partners, jumped 0.5 percent today while retreating on a weekly basis for the first time since April. The yen strengthened against 12 of 16 of its most-traded peers.
The cost of insuring against losses on Germany’s sovereign debt rose for a sixth day with credit-default swaps linked to bunds adding two basis points to 108 basis points, the highest since January. The yield on its sovereign 10-year bund dropped five basis points to 1.33 percent, paring the rate’s first weekly advance in 12. The Spanish 10-year bond yield rose 13 basis points to 6.22 percent, after falling for six straight days, and swaps on government debt rose 16 basis points to 588.
Oil slipped 0.8 percent to $84.10, recovering from a drop of as much as 3.3 percent and rising on a weekly basis for the first time since April.
The MSCI Emerging Markets Index slumped 0.9 percent, paring its first weekly gain since March to 1.3 percent. The Hang Seng China Enterprises Index of mainland stocks slipped 1.3 percent before data tomorrow on China’s inflation, industrial output and investment. Taiwan’s Taiex index slipped 1.1 percent and South Korea’s Kospi lost 0.7 percent.
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