Bloomberg News

Most Stocks Gain in Resumed U.S. Trading; Treasuries Gain

October 31, 2012

Stocks Rise as U.S. Trading Resumes; Commodities, Euro Gain

Sandbags surround the New York Stock Exchange in New York, on Oct. 30. Photographer: Victor J. Blue/Bloomberg

Most U.S. stocks gained as equity markets resumed trading for the first time this week after Hurricane Sandy. Oil climbed and Treasuries rose a third day.

The Standard & Poor’s 500 Index climbed less than 0.1 percent to close at 1,412.17 after gaining as much as 0.5 percent and losing 0.4 percent during the session. Trading of S&P 500 stocks was 6 percent above the 30-day average. Almost three U.S. shares gained for every two that fell. Ten-year Treasury yields lost three basis points to 1.69 percent. Oil in New York added 0.7 percent and gasoline jumped 1.2 percent. The euro rose for a second day versus the yen as governments pressed Greece to make deeper spending cuts to keep aid flowing.

U.S. stock markets opened today after the biggest Atlantic storm in history forced the first back-to-back closings of the New York Stock Exchange for weather since 1888. Business activity in the U.S. contracted in October for a second month, according to a report today, following data yesterday that showed home prices rose by the most in two years.

“There is some sigh of relief to see that the worst scenario didn’t unfold,” Eric Teal, chief investment officer at First Citizens Bancshares Inc., which manages $4.5 billion in Raleigh, North Carolina, said in a phone interview. “The fundamentals are slowly improving in housing and that will continue to show modest improvement in coming months.”

The S&P 500 lost 2 percent in October after four straight monthly gains. Sandy may cut economic output by $25 billion in the fourth quarter, according to Gregory Daco, a U.S. economist at IHS Global Insight in Lexington, Massachusetts. The fourth quarter pace of growth may slow to between 1 percent and 1.5 percent, down from an estimate of 1.6 percent, he said.

Muted Response

“In terms of financial markets, we are pleased to see that the initial response has been very muted,” Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $3 billion, wrote today. “In general, we would advise against ‘playing the storm’ unless it is on a very stock- specific basis.”

The NYSE opened its market on time by running on backup power from generators. Brokers on the NYSE floor experienced limited Internet and mobile-phone connections while still being able to trade from the exchange. Knight Capital Group Inc., one of the largest U.S. market makers, shut down trading of equities after backup power failed at its headquarters in Jersey City, New Jersey.

‘Very Smoothly’

Trading went “very smoothly, everything opened fairly quickly,” Duncan Niederauer, the chief executive officer of NYSE Euronext, said in an interview with Bloomberg Television’s Matt Miller. “Participation has been a lot more active than we thought.”

Apple Inc. declined 1.4 percent after Chief Executive Officer Tim Cook embarked on a sweeping management overhaul at the world’s most valuable company. Home Depot Inc. (HD:US) and Lowe’s Cos. climbed more than 2 percent amid speculation the home- improvement retailers would be helped by spending related to the storm.

General Motors Co., the largest U.S. automaker, jumped 9.5 after third-quarter profit topped estimates. Profit has exceeded projections at 72 percent of the companies that have released third-quarter results so far, while sales trailed estimates at 60 percent of firms, data compiled by Bloomberg show.

The Institute for Supply Management-Chicago Inc.’s business activity gauge increased to 49.9 this month from 49.7 in September. A reading of 50 is the dividing line between expansion and contraction. The median estimate of 54 economists surveyed by Bloomberg forecast it would rise to 51.

Oil Refineries

Oil advanced for a second day, gaining 0.7 percent to $86.24 a barrel, as refiners resumed operations, paring the biggest monthly decline since May. Futures climbed as much as 1.8 percent as Philadelphia Energy Solutions’ 355,000-barrel-a- day Pennsylvania refinery restored operations. PBF Energy Inc. said two plants on the East Coast operated at reduced rates.

The euro gained 0.2 percent to 103.35 yen. Norway’s krone rose as the central bank kept it benchmark interest rate on hold and said it won’t buy foreign currency.

The yield on Italy’s 10-year bond fell three basis points to 4.96 percent, declining for a second day. Similar-maturity Spanish debt yields slipped five basis points to 5.62 percent.

Treasuries have handed investors a 0.3 percent loss this month as of Oct. 29, and the three-month decline is 0.8 percent, the Bank of America Merrill Lynch data show. The yield on the 10-year note traded in a four basis point range as government debt was set to deliver a third month of losses, the longest streak since the last quarter of 2010.

The MSCI Emerging Markets Index (MXEF) increased 0.2 percent. Russia’s Micex Index advanced 0.1 percent, Brazil’s Bovespa index slipped 1 percent and the Shanghai Composite Index (SHCOMP) added 0.3 percent. South Korea’s Kospi index jumped 0.7 percent as industrial output climbed for the first time in four months.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lu Wang in New York at lwang8@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net


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Companies Mentioned

  • HD
    (Home Depot Inc/The)
    • $81.03 USD
    • -0.17
    • -0.21%
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