U.S. stocks and commodities rallied for a second day, while the dollar and Treasuries fell, as investors awaited presidential election results. Oil and gasoline surged the most in a month before an inventories report.
The Standard & Poor’s 500 Index increased 0.8 percent to close at 1,428.39 and the Dow Jones Industrial Average jumped 133 points. Treasury 10-year notes snapped a two-day advance, sending yields up seven basis points to 1.75 percent, and the dollar fell versus 14 of 16 major peers. Oil and gasoline jumped at least 3 percent amid forecasts that fuel supplies slid as Hurricane Sandy shut East Coast refineries. Australia’s currency rallied as the central bank left interest rates unchanged.
U.S. voters decide today between giving President Barack Obama another four years or replacing him with Republican challenger Mitt Romney. The next president will need to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in 2013 unless Congress can reach a budget compromise.
“We’re moving closer to a definition on the election front,” said Mark Luschini, who helps manage $54 billion as chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC. “It’s offering investors reason to say, ‘we move from the unknown category regardless of the outcome.’”
Gauges of commodity, industrial and financial shares rose more than 1 percent to lead an advance among nine of the 10 main industries in the S&P 500, with only utilities retreating. Health-care equipment and service companies performed the worst among 24 groups. United Technologies Corp., Boeing Co. and Hewlett-Packard Co. jumped more than 2.2 percent to lead the Dow higher. The Morgan Stanley Cyclical Index, a gauge of 30 companies considered most-tied to economic prospects, rallied 1.5 percent to the highest level since March.
Computer Sciences Corp. (CSC:US), the manager of networks for NASA and the U.S. Navy, surged 17 percent after a cost-cutting program helped the company boost its annual profit forecast. Express Scripts Holding Co., the largest U.S. pharmacy benefits manager, plunged 12 percent after saying analysts’ profit estimates for 2013 were “overly aggressive.”
Of S&P 500 companies that have released third-quarter results, 71 percent beat analysts’ profit estimates, while 60 percent missed sales projections, according to data compiled by Bloomberg. Nineteen members of the index are due to report earnings today.
The options market is implying about a 2 percent move up or down in the S&P 500 over the next four trading days, according to Susquehanna Financial Group LLLP’s head of derivatives strategy Trevor Mottl. That’s equivalent to an even-odds range of 1,389 to 1,445 for the close on Nov. 9 based on options prices as of yesterday, he wrote today in a note to clients.
Subfreezing temperatures and confusion greeted voters in storm-ravaged New York and New Jersey, where officials moved more than 240 polling sites damaged by Hurricane Sandy to alternate locations.
“On the fiscal side, how the looming fiscal cliff will be dealt with will hinge greatly on the makeup of Congress and its relationship with the new president,” Marc Chandler, head of currency strategy at Brown Brothers Harriman & Co. in New York, wrote in a note to clients. “With regards to monetary policy, the potential successor to Fed chief Ben Bernanke when his term ends in 2014 could have an outsize impact on the dollar.”
More than two stocks gained for each that fell in the Stoxx 600. Hannover Re rallied 4.5 percent as the world’s fourth- biggest reinsurer said it expects record earnings this year. ARM Holdings Plc (ARM) climbed 2.1 percent on a Bloomberg News report that Apple Inc. was considering ways to replace Intel Corp. processors in its personal computers. Volkswagen AG, Europe’s biggest carmaker, fell 4.1 percent after announcing the sale of as much as 2.5 billion euros ($3.2 billion) in convertible bonds.
The European Union’s top economic commissioner said euro leaders need to lock down an agreement on tackling Greece’s debt by next week. German factory orders fell the most in a year in September, the Economy Ministry in Berlin said today..
The S&P GSCI gauge of commodities jumped 2.3 percent, with 21 of 24 materials rising. Wheat for delivery in December gained 1.3 percent in Chicago as deteriorating crop conditions in the U.S., the largest exporter, added to global supply concerns.
Oil climbed 3.6 percent, the most in a month, to $88.71 a barrel and gasoline climbed 3 percent to $2.6989 a gallon. Gasoline supply may have dropped to 198 million barrels in the seven days ended Nov. 2, according to the survey. That would be the first decline in four weeks. The Energy Department is scheduled to release its inventory report at 10:30 a.m. tomorrow in Washington.
Australia’s currency strengthened against 15 of 16 major peers. The Reserve Bank of Australia left the overnight cash- rate target at 3.25 percent, citing a stabilizing global economy.
The MSCI Emerging Markets Index (MXEF) advanced 0.6 percent, led by consumer, energy and technology shares. South Korea’s Kospi Index jumped 1.1 percent as Samsung Electronics Co. climbed to a four-week high after researcher IDC said the company’s share of the tablet market increased. Taiwan’s Taiex Index added 0.7 percent. Russia’s Micex Index increased 0.4 percent and India’s Sensex added 0.3 percent. The Shanghai Composite Index (SHCOMP) fell 0.4 percent before the start of China’s leadership congress.
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