The Standard & Poor’s 500 Index capped its biggest weekly advance since July and Treasuries fell the most in a month as tensions eased over Ukraine and earnings from General Electric Co. and Morgan Stanley topped estimates.
The S&P 500 climbed 0.1 percent to 1,864.85 at 4 p.m. in New York, advancing for a fourth straight day. The yield on 10-year Treasuries rose nine basis points to 2.72 percent. The Stoxx Europe 600 Index climbed 0.5 percent. Russia’s Micex Index reversed a loss while the ruble jumped. The dollar strengthened for a fifth day against a basket of major peers. Oil added 0.5 percent to trade above $104 a barrel for a fifth day, while gold lost 0.7 percent.
Four-way talks on the crisis in Ukraine ended with an accord aimed at taking the first steps toward de-escalating the conflict after President Vladimir Putin said he hopes he won’t have to send troops. Morgan Stanley and General Electric Co. jumped as earnings topped forecasts, while Google Inc. and International Business Machines Corp. slid on disappointing sales. U.S. jobless claims increased less than forecast, indicating the world’s largest economy is holding up.
“Any deceleration of the conflict will be a relief for the market,” Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “Combine the ease of the tension between Russia and Ukraine and generally a positive tone of earnings, the result is an upward drifting market.”
The agreement in Geneva was announced after talks between Russian Foreign Minister Sergei Lavrov, his Ukrainian counterpart, Andriy Deshchytsia, U.S. Secretary of State John Kerry and Catherine Ashton, the European Union’s foreign-policy chief, went on for more than six hours, longer than scheduled. Kerry said Russia, which the U.S. and its European allies accuse of stoking the conflict, must start implementing the deal within days.
“The Geneva meeting on the situation in Ukraine agreed on initial concrete steps to de-escalate tensions and restore security for all citizens,” the four said in a joint statement. “All sides must refrain from any violence, intimidation or provocative actions.”
Financial markets in the U.S., U.K., Germany, Hong Kong, Singapore, Australia and New Zealand are among those that will be closed for a holiday tomorrow. Trading of U.S. government securities closed at 2 p.m. in New York today.
The S&P 500 has jumped 2.7 percent this week, the most since July 12, and is up 0.9 percent for the year. The index dropped as much as 4 percent from its April 2 record as investors sold Internet and biotechnology stocks, the best performers during the five-year bull market, amid concern valuations had become too expensive before earnings.
Twenty-five companies in the S&P 500 were scheduled to report earnings today. Profit per share for the index’s constituents probably increased 0.7 percent in the first quarter, according to analyst estimates compiled by Bloomberg. Revenue climbed 2.6 percent from a year earlier, the projections show.
Seven of 10 S&P 500 industries gained as industrial and energy companies climbed 0.8 percent for the best performances, as General Electric jumped 1.7 percent. The Dow Jones Industrial Average closed 16.31 points lower, dragged down by IBM.
Morgan Stanley added 2.9 percent as a gain in trading revenue helped profit top estimates. Google slid 3.7 percent as rising costs and a shift of advertising to mobile phones curbed results. IBM dropped 3.2 percent after reporting sales that trailed projections. UnitedHealth Group Inc. sank 3.1 percent after profit fell on cuts to its Medicare Advantage program.
“It’s a normal quarter where expectations were revised down far enough that companies are beating expectations,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm manages about $245 billion. “I would view this as not an upside breakout, not a whole lot of positive surprises, but certainly satisfactory. We feel reasonably good that the second quarter and the rest of the year will trend in the positive direction.”
Treasuries fell earlier in the day as the jobless claims report added to speculation the Federal Reserve will raise interest rates at some point next year.
Yellen said yesterday the central bank is committed to policies that will support the recovery. Fed policy makers are unwinding the bond-buying program they have used to support the economy. They have kept their target for overnight lending between banks in a range of zero to 0.25 percent since 2008.
Three rounds of bond purchases from the Fed have helped fuel economic growth, sending the S&P 500 (SPX)surging as much as 180 percent from its 2009 low.
Sixteen of the 19 industry groups in the Stoxx 600 advanced, with trading volumes 20 percent lower than the 30-day average, according to data compiled by Bloomberg. The gauge jumped the most in more than a month yesterday, and gained 1.1 percent for the week.
Publicis Groupe SA (PUB), the French company merging with Omnicom Group Inc. to form the world’s biggest advertising company, gained 1.3 percent after saying first-quarter sales rose. SAP AG lost 1.2 percent after Germany’s biggest technology company reported quarterly sales and earnings that missed analysts’ estimates.
Remy Cointreau SA slid 3.3 percent after the maker of Remy Martin cognac said it expects to report a slump in annual earnings after sales fell more than analysts had anticipated on lower demand in China. Diageo Plc (DGE) declined 3.7 percent after the world’s biggest distiller reported third-quarter sales unexpectedly tumbled and said weakness in emerging markets will weigh on growth this year.
The MSCI Emerging Markets Index rose 0.8 percent as India’s Sensex jumped 1.6 percent, gaining for the first time in four days. Russia’s Micex Index rose 0.5 percent, erasing losses. The ruble jumped 1.4 percent against the dollar, leading gains by emerging-market currencies as investors became more comfortable owning higher-returning assets.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose 0.1 percent. It erased an earlier decline of 0.2 percent, its biggest decrease since April 9.
The dollar gained 0.2 percent to 102.46 yen, the highest level since April 8. The U.S. currency fell as much as 0.4 percent earlier. The greenback was little changed at $1.3814 per euro after also falling 0.4 percent earlier. The euro gained 0.2 percent to 141.52 yen.
Gold fell as signs of gains in the U.S. economy eroded demand for the metal as a store of value. Futures dropped 0.7 percent to close at $1,293.90 an ounce. West Texas Intermediate oil rose 0.5 percent to $104.30 a barrel.
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