U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from its worst drop in five weeks, as House Speaker John Boehner said he expects to keep working on a budget plan with President Barack Obama. Treasuries erased earlier gains and commodities trimmed losses.
The S&P 500 rose 0.6 percent to 1,443.69 at 4 p.m. in New York after slipping 0.8 percent from a two-month high yesterday. Europe’s benchmark stock index closed little changed. The S&P GSCI Index of commodities was down less than 0.2 percent after losing 0.6 percent earlier. Gold slumped to the lowest since August as quickening U.S. economic growth damped speculation of further monetary stimulus. Ten-year Treasury yields were little changed at 1.80 percent.
Boehner’s remarks helped equities rebound after the S&P 500 fell as much as 0.2 percent earlier on signs budget talks were deteriorating. Concerns about the negotiations overshadowed government data showing the economy grew 3.1 percent last quarter, more than previously estimated and exceeding the forecasts of economists in a Bloomberg poll.
“Stocks were flat much of the day until a modest rally got under way after Boehner said he would continue to work with Obama, putting to rest some fears that talks over a deal were losing traction,” Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which oversees $350 billion, said in an interview.
The House will vote today on Boehner’s plan to raise taxes on incomes over $1 million, a plan which the White House has said Obama would veto because he wants the threshold set at $400,000. Boehner accused Obama of being unwilling to stand up to fellow Democrats in the fight over how to avert spending cuts and tax increases scheduled to begin in January.
A budget plan is needed to prevent more than $600 billion of automatic tax increases and spending cuts, known as the fiscal cliff, from coming into effect next year.
Today’s gain in stocks extended the S&P 500’s 2012 advance to 15 percent, poised for its best year since 2009.
NYSE Euronext (NYX:US) surged a record 34 percent after IntercontinentalExchange Inc., the 12-year-old energy and commodity futures bourse, agreed to acquire the owner of the New York Stock Exchange for cash and stock worth $8.2 billion, moving to take control of the world’s biggest equities market.
Gauges of financial, telephone and commodity companies led gains in the 10 of the main industry groups in the S&P 500. Bank of America Corp., Walt Disney Co. and JPMorgan Chase & Co. climbed more than 2 percent for the biggest gains in the Dow Jones Industrial Average.
Manufacturing in the Philadelphia region unexpectedly expanded in December to an eight-month high. The Federal Reserve Bank of Philadelphia’s general economic index rose to 8.1, from minus 10.7 in November. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Another report today showed the Conference Board’s gauge of the outlook for the next three to six months dropped 0.2 percent after a revised 0.3 percent gain in October that was larger than initially reported. The November drop matched the median forecast in a Bloomberg survey. The Labor Department said the number of Americans filing first-time claims for unemployment insurance payments rose for the first time in five weeks, increasing by 17,000 to 361,000 last week.
The Stoxx Europe 600 (SXXP) Index was little changed after closing at a 19-month high yesterday. SBM Offshore NV soared 19 percent, the most in at least 23 years, after seeking to settle a dispute with Talisman Energy Inc. Ericsson AB lost 1.8 percent after taking an 8 billion-krona ($1.2 billion) charge related to its wireless-chip venture with STMicroelectronics NV. UBS AG (UBSN), Switzerland’s biggest bank, dropped 1.1 percent as it faces scrutiny in Hong Kong for possible misconduct linked to the city’s interbank rates.
Silver, soybeans, wheat and copper lost at least 1.8 percent to lead declines in 19 of 24 commodities tracked by the S&P GSCI. New York-traded crude oil rose for a fifth day, increasing 15 cents to $90.13 a barrel. Gold futures lost 1.3 percent to $1,645.90 an ounce.
The euro was up 0.1 percent at $1.3242, near an eight-month high of $1.3308 reached yesterday. The dollar weakened against 12 of 16 major peers, losing the most versus the Swedish krona and Norwegian krone.
The MSCI Emerging Markets Index (MXEF) fell 0.1 percent to snap a two-day rally, as benchmark gauges in Argentina, Brazil and Russia rose at least 0.5 percent while stocks in Taiwan and Colombia retreated. The gauge of developing markets has gained 15 percent this year.
The yen strengthened against most major peers as the Bank of Japan (8301) maintained its inflation goal at 1 percent after newly elected Prime Minister Shinzo Abe called for a doubling of the target. Japan’s central bank expanded its asset purchase funds to 76 trillion yen from 66 trillion yen, and kept its credit- lending program at 25 trillion yen.
“There had been an expectation that the BOJ would maybe do more,” said Melinda Burgess, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “There was a bit of market disappointment that they didn’t deliver as much as we were expecting.”
The yen has tumbled 13 percent this year, the worst performer among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has weakened 3.5 percent and the euro has dropped 1 percent.
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