U.S. stocks snapped four days of losses and commodities rallied after European Central Bank President Mario Draghi pledged to preserve the euro. The 17- nation currency strengthened against the dollar by the most in almost a month.
The Standard & Poor’s 500 Index climbed 1.7 percent at 4 p.m. in New York for the biggest gain in almost two weeks. S&P 500 futures added 0.1 percent as of 5:38 p.m. The Stoxx Europe 600 Index (SXXP) jumped 2.5 percent. The euro appreciated 1 percent to $1.2282 as the dollar weakened against 15 of its 16 major peers. The S&P GSCI gauge of 24 raw materials rose 0.2 percent and oil advanced for a third day. Spain’s 10-year bond yield tumbled 45 basis points to 6.93 percent after reaching the highest in the euro era yesterday.
Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the currency bloc. 3M Co., Visa Inc. and Sprint Nextel Corp. gained after posting better-than-estimated quarterly results.
Draghi “dampened some of the fears that something was going to come apart imminently,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management. His firm oversees about $320 billion. “He’s basically saying there’s still a lot of will of the ECB leadership to do whatever it takes to keep this thing together.”
The euro rose as much as 1.4 percent, the most since June 29, after touching $1.2043 on July 24, the lowest since June 2010. The dollar was little changed at 78.21 yen and higher- yielding currencies including the New Zealand dollar strengthened most against their major peers.
Italy’s two-year note yield fell 88 basis points to 4.06 percent. Rates on Germany’s 10-year bonds climbed six basis points to 1.32 percent, and yields on similar-maturity Treasuries increased three basis points to 1.43 percent.
3M, the maker of products ranging from dental braces to commercial sealants, rose 2.1 percent. Second-quarter profit beat analysts’ estimates as gains in efficiency helped trump a drag from foreign-exchange rates. Visa (V:US) advanced 3.7 percent. The company has benefited from a consumer shift from cash to electronic payments that shows no signs of abating.
Sprint Nextel rallied 20 percent. Sales at the wireless carrier were bolstered by customers spending more on data plans. Zynga Inc., the biggest developer of games played on Facebook (FB:US) Inc., plunged 37 percent on disappointing profit.
Facebook slumped 8.5 percent ahead of its first quarterly results since selling shares to the public. After the market closed, it tumbled 9.5 percent at 5:38 p.m. in New York as the company posted a narrower profit margin amid surging costs.
More than 60 companies in the S&P 500 reported results today. Of the 278 index members to have reported results this quarter, 72 percent have topped analysts’ projections, according to data compiled by Bloomberg.
Applications for jobless benefits decreased by 35,000 in the week ended July 21 to 353,000, Labor Department figures showed. Economists forecast 380,000 claims, according to the median estimate in a Bloomberg survey. Bookings for goods meant to last at least three years rose 1.6 percent for a second month, a report from the Commerce Department showed. The median forecast of economists surveyed by Bloomberg News called for a 0.3 percent gain.
A gauge of U.S. speculative-grade corporate debt risk fell the most in almost a month. The Markit CDX North America High Yield Index, a credit-default swaps benchmark used to hedge against losses on high-yield debt or to speculate on creditworthiness, fell 15.8 basis points, the biggest drop since June 29, to a mid-price of 597.1 basis points, according to prices compiled by Bloomberg.
Oil added 0.5 percent to $89.39 in New York. Copper advanced 0.5 percent and gold rose 0.4 percent. Raw sugar fell the most in more than four weeks in New York as dry weather at top producer Brazil helped accelerate harvesting and boost output this month.
European stocks rose for the first time in five days. Unilever (UNA), the world’s second-largest consumer-goods maker, rallied 5.6 percent in Amsterdam as sales growth beat analysts’ estimates. Rolls-Royce Holdings Plc, the world’s second-largest maker of aircraft engines, rose 6.7 percent as underlying pretax profit topped forecasts.
Royal Dutch Shell Plc, Europe’s biggest oil company, dropped 2.3 percent in London after reporting a bigger decline than projected in second-quarter earnings. Siemens AG, the region’s largest engineering company, slid 1.2 percent after saying its full-year earnings goal has become harder to reach.
The MSCI Emerging Markets Index added 1.3 percent. China’s Shanghai Composite Index fell 0.5 percent, the lowest level since March 2009 as speculation the government will maintain real-estate curbs overshadowed a State Council plan to develop the nation’s central provinces.
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