Stocks and metals gained on data showing improvement in manufacturing and the U.S. labor market amid a three-hour trading halt on the Nasdaq Stock Market. The dollar rose as signs of an improving global economy increased speculation the Federal Reserve will reduce stimulus.
The Standard & Poor’s 500 Index (SPX) added 0.9 percent to 1,656.96 at 4 p.m. in New York. The Nasdaq Composite Index rose 1.1 percent to 3,638.71 after trading resumed following a computer error. The Stoxx Europe 600 Index climbed 1 percent. Copper jumped 0.7 percent to pace gains in commodities. The yield on 10-year Treasuries was little changed after reaching a two-year high. The Bloomberg U.S. Dollar Index added 0.2 percent after a 0.6 percent advance yesterday.
Economic reports showed Germany led growth in manufacturing and services in the euro area, while a gauge for China’s factory output unexpectedly indicated expansion. The fewest workers in more than five years applied for U.S. jobless benefits over the past month, indicating the labor market continues to improve, and an index of leading indicators rose in July by the most in three months.
“We’re seeing better economic data out of Europe and China, with several positive surprises,” Thomas Haerter, who helps oversee about $54 billion as chief strategist at Swisscanto Asset Management AG in Zurich, said in a telephone interview today. “Getting better-than-forecast numbers out of Europe is even more positive for stocks than better-than-forecast data out of the U.S., as the growth problem is mainly in Europe.”
Computer errors shook American equity markets again as malfunctioning software that feeds data between exchanges prompted Nasdaq to halt trading in stocks and options. The Nasdaq Composite rose 0.9 percent to 3,631.17 before it stopped at around 12:20 p.m.
Buying and selling in many of the country’s most heavily traded shares from Apple Inc. to Intel Corp. and Facebook Inc. ground to a virtual halt as brokers were unable to execute orders until trading resumed at 3:25 p.m.
The disruption, coming two days after options markets were roiled by mistaken trades sent by Goldman Sachs Group Inc., is the latest in a series of computer malfunctions that have raised questions about the reliability of electronic markets.
“It’s a big deal for the Nasdaq, but it wasn’t as impactful on the market as you would expect,” Douglas Kass, the founder of Palm Beach, Florida-based Seabreeze Partners Management Inc., said in a phone interview. “There’ll be some residual loss of confidence on the part of retail investors but beyond that I don’t think it’ll have impact.”
The halt resulted in the second-fewest number of shares changing hands on U.S. exchanges in at least five years during a full-day session, excluding holiday trading. About 4.4 billion shares traded today, 30 percent below the three-month average.
The S&P 500 fell 0.6 percent yesterday to the lowest level since July 8 and the Dow Jones Industrial Average declined for a sixth day, the longest losing streak in 13 months, after the release of minutes from the Fed’s latest meeting. The report showed policy makers were “comfortable” with Chairman Ben S. Bernanke’s plans to start reducing bond buying this year should the U.S. economy improve. Fed stimulus helped push the S&P 500 up as much as 153 percent from its March 2009 low.
The number of jobless claims in the month ended Aug. 17 declined to 330,500 a week on average, the least since November 2007, Labor Department figures showed today. Compared with a week earlier, claims rose by 13,000 to 336,000, in line with the median forecast of 48 economists surveyed by Bloomberg.
The Conference Board’s gauge of the outlook for the next three to six months increased 0.6 percent after no change the prior month, the New York-based group said today. The median forecast in a Bloomberg survey of economists called for a 0.5 percent advance.
A gauge of homebuilders added 1.9 percent after a report showed U.S. house prices rose in June. Newmont Mining Corp. and Freeport-McMoRan Copper & Gold Inc. advanced more than 1 percent as copper rose. Yahoo Inc. climbed 3.1 percent after data showed it attracted more U.S. visitors than Google Inc. in July. Hewlett-Packard Co. (HPQ:US) dropped 12 percent as the world’s second-biggest maker of personal computers issued a forecast for fiscal fourth-quarter profit that missed some estimates.
More than five shares advanced for every one that declined in the Stoxx 600, which rebounded 1 percent from a three-week low. Royal Ahold NV rallied 5.2 percent after the Dutch owner of the Stop & Shop supermarket chain reported second-quarter earnings that beat analysts’ estimates.
Euro-area services expanded in August for the first time in 19 months, led by Germany, and manufacturing gained for a second month, London-based Markit Economics said today.
“We are probably either at or just past the mid-point of the economic cycle,” Ashish Misra, who helps oversee $17 billion as head of investment policy and research for Lloyds TSB Private Banking in London, said in a phone interview. “The negative influence of rising interest rates will be, or is being, offset by the positive influence of the reasons behind the rise in interest rates.”
The MSCI Emerging Markets Index fell 0.2 percent, extending its six-day slump to 4.7 percent. The Philippine Stock Exchange Index tumbled 6 percent as trading resumed after a three-day closure. The Jakarta Composite Index dropped 1.1 percent, declining 20 percent from a record-high three months ago. Benchmark gauges in Turkey, Malaysia and South Korea declined at least 1 percent. India’s Sensex rose 2.3 percent after a four-day 7.6 percent slump sent the gauge to an 11-month low.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 1.1 percent while the Shanghai Composite Index slipped 0.3 percent. A purchasing managers’ index of preliminary China manufacturing data unexpectedly rose to 50.1 for August, from 47.7 in July, according to HSBC Holdings Plc and Markit Economics. That compares with a 48.2 median estimate by 16 analysts surveyed by Bloomberg. A reading above 50 indicates an expansion.
India’s rupee and the Turkish lira slumped to all-time lows. The rupee dropped 0.9 percent to 64.63 against the dollar, after reaching 65.56, and the lira slipped as much as 0.9 percent to $1.9959. Thailand’s baht and the Malaysian ringgit dropped to three-year lows.
South Africa’s rand gained 1.1 percent and Australia’s dollar jumped 0.4 percent after the Chinese manufacturing report boosted trade prospects.
Norway’s krone weakened for an eighth consecutive day against its Swedish counterpart, sliding as much as 1.2 percent to 1.0673 kronor, the weakest level since March 2004. Sweden’s currency gained against 14 of its 16 main counterparts after a report showed unemployment unexpectedly fell last month.
The euro was little changed at $1.3357 while the yen weakened 1.1 percent to 98.72 per dollar.
Treasury 10-year note yields fell one basis point to 2.89 percent after climbing eight basis points yesterday. The rate reached 2.93 percent, the most since July 2011. German bonds fell for a second day, sending 10-year yields up five basis points to 1.92 percent.
Gold futures rose for the second time in three days, gaining 0.1 percent, on speculation that demand for jewelry and bars will increase amid signs of a pickup in the economy in China, the world’s second-biggest consumer of the metal.
Copper rose 0.7 percent to $3.3345 a pound on the Comex in New York. China is the biggest buyer of copper, followed by the U.S. and Germany.
West Texas Intermediate oil advanced from a two-week low, gaining 1.1 percent to $105.03 a barrel.
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