Stocks surged, sending the Standard & Poor’s 500 Index to its highest level since June 2008, as earnings at companies from Ford Motor Co. to 3M Co. beat analysts’ estimates. Treasurys rose, the dollar fell versus the euro for a sixth day and commodities were little changed.
The S&P 500 increased 1 percent to 1,349.15 at 12:13 p.m. in New York and the Stoxx Europe 600 Index gained 0.3 percent. The dollar matched the longest losing streak versus the euro in almost two years amid speculation the Federal Reserve will consider measures to keep interest rates low. Ten-year Treasury yields slipped two basis points to 3.34 percent, the lowest level in a month. Oil was little changed near $112 a barrel and gold and silver retreated.
Before today, the S&P 500 had failed to top its 2011 high reached on February 18 even as it closed less than 1 percent below the peak on eight days in April. Stocks rallied today as Ford, 3M and United Parcel Service Inc. joined the 79 percent of S&P 500 companies that have topped analyst earnings estimates since April 11. Investors also awaited the end of a Fed meeting tomorrow to gauge the central bank’s outlook for interest rates and its economic stimulus program known as quantitative easing.
“Corporate performance is excellent,” said Stephen Wood, the New York-based chief market strategist for Russell Investments, which manages about $155 billion. “The underlying economic performance in the United States has been a pleasant surprise. Our expectation is that the Fed ends QE2 in the summer and the growth baton will be handed from policy to the private economy. That’s providing rationale for the stock market to move forward.”
Dollar Index, S&P 500
The Dollar Index, used to track the U.S. currency against six trading partners, traded near the lowest since August 2008 on speculation the Fed will signal it plans to keep interest rates close to zero for an extended period. Eleven of 16 major counterparts climbed against the U.S. currency, with the euro strengthening 0.3 percent to $1.4629.
The S&P 500 rose for the fourth time in five days, erasing yesterday’s decline. Industrial and health-care companies led gains among all 10 of the main industry groups. Ford, the second-largest U.S. automaker, advanced 2.1 percent after first- quarter profit increased 22 percent to the most for the period since 1998 amid higher prices for fuel-efficient new models.
3M Co. said it had first-quarter profit of $1.49 a share, topping the average analyst estimate of $1.44 a share. The stock rose 2.1 percent. UPS, the world’s largest package-delivery company, climbed 1.9 percent after also boosting its full-year forecast amid increasing demand for international shipping.
Stocks extended gains after confidence among U.S. consumers increased more than forecast in April, signaling the improving labor market is helping Americans weather rising fuel costs. The Conference Board’s confidence index rose to 65.4 from a revised 63.8 reading in March. The median forecast of economists surveyed by Bloomberg News projected an advance to 64.5.
Another release showed residential real estate prices dropped in February by the most in more than a year. Treasury 10-year yields fell two basis points to 3.35 percent.
Five stocks climbed for every two that fell in the Stoxx Europe 600. UBS AG, Switzerland’s largest bank, rallied 3.9 percent after attracting the highest wealth management inflows since the end of 2007 in the first quarter. Parmalat SpA jumped 11 percent after Groupe Lactalis bid for holdings in Italy’s biggest dairy company it doesn’t already own.
The MSCI Emerging Markets Index was little changed after China’s Shanghai Composite Index slid 0.9 percent. Industrial & Commercial Bank of China Ltd. lost 0.3 percent in Hong Kong after the world’s largest lender by market value and three rivals were told last month to maintain capital adequacy ratios of at least 11.8 percent in 2011, one person said, declining to be identified as the plan isn’t public. Agricultural Bank of China Ltd., the nation’s fourth biggest, should target 11.7 percent, two people said.
Credit-default swaps on Greek government bonds increased 13 basis points to 1,345 basis points. The yield on the nation’s 10-year bonds rose as much as 47 basis points to 15.38 percent. Greece’s 2010 budget gap was 10.5 percent of gross domestic product, more than a percentage point wider than the government estimated, according to figures from Europe’s statistics agency today.
Yields on government securities from Greece, Ireland and Portugal reached records amid speculation the heavily indebted nations won’t be able to avoid restructuring.
The yield on Irish two-year government notes climbed to a euro-era record of 12.09 percent. Portuguese two-year yields rose 23 basis points to 11.70 percent, the most since at least 1996 when Bloomberg began collecting the data.
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