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Stocks Rally, Treasuries, Dollar Drop on Durable Goods Data
2010-09-24 13:43:00.643 GMT
By Michael P. Regan and Nikolaj Gammeltoft
Sept. 24 (Bloomberg) -- U.S. stocks rallied, Treasuries
turned lower and the Dollar Index slumped to an almost eight-
month low as demand for American capital equipment rebounded and
German business confidence improved.
The Standard & Poor's 500 Index climbed 1.4 percent to
1,140.62 at 9:38 a.m. in New York, snapping a three-day drop and
extending its longest streak of weekly gains in five months. The
Stoxx Europe 600 Index erased an earlier slide to advance 0.8
percent. The 10-year Treasury yield rose 5 basis points to 2.61
percent. The Dollar Index, a measure of the U.S. currency
against six major peers, lost 0.7 percent to 79.416.
Concern the world's largest economy may relapse into
another recession was assuaged after the 2 percent growth in
orders for durable goods excluding transportation equipment,
which was twice the median forecast in a Bloomberg survey of
economists. German business confidence unexpectedly rose to the
highest level in more than three years, even as costs to protect
the bonds of Europe's most-indebted nations reach records.
"The double-dip seems to be off the table," said Eric
Mintz, who helps oversee $3.3 billion at Eagle Asset Management
in St. Petersburg, Florida. "The durable goods report was
strong, it supports the idea that companies are spending money,
which is important for overall economic growth. So it's another
bullish indicator."
Nike Rallies
The S&P 500 snapped a three-day slide and was poised for a
fourth straight weekly gain, its longest streak since April.
Nike Inc. rallied 4.1 percent after the largest maker of
athletic shoes posted earnings that topped estimates as orders
in China surged 25 percent and North America sales continued to
rebound on a growing apparel business. Rival Adidas AG gained
4.8 percent.
Hewlett-Packard Co., Alcoa Inc. and Caterpillar Inc.
climbed at least 2.1 percent to lead gains in 28 of 30 stocks in
the Dow Jones Industrial Average. Bookings for goods such as
computers and communications gear climbed 4.1 percent after a
5.3 percent decline in July that was smaller than previously
estimated, Commerce Department data showed. Total orders dropped
1.3 percent, depressed by volatile demand for aircraft.
European equities recovered from earlier losses triggered
by growing concern over sovereign finances amid record yield
premiums demanded by investors to own bonds of some of the
region's most indebted nations instead of benchmark German
bunds.
The difference in yield, or spread, between Portuguese 10-
year bonds and German bunds was 404 basis points after earlier
widening to a record near 420 basis points.
Portuguese Finances
Diario Economico reported that Portuguese Prime Minister
Jose Socrates and Pedro Passos Coelho, leader of the opposition,
met twice this week to discuss the 2011 budget before talks
broke down. The Irish 10-year yield spread to bunds was at 419
basis points after rising to 430 basis points earlier.
The MSCI Emerging Markets Index added 0.6 percent, set for
the highest close since July 2008. The measure has advanced 1.7
percent this week, set for a fourth straight gain and the
longest winning streak since the six weeks through March 19.
Indonesia's Jakarta Composite index climbed 1.8 percent to a
record and the South Korean Kospi index gained 0.8 percent.
The MSCI Asia Pacific Index fell 0.1 percent, trimming its
fourth straight weekly gain. Samsung Electronics Co., which gets
a fifth of its revenue in America, dropped 2.3 percent. Toyota
Motor Corp. led a rally among Japanese exporters, climbing 0.7
percent.
Silver climbed to the highest price since 1980, rising as
much as 1.1 percent to $21.445 an ounce, as investors sought a
protection of wealth in the metal that may also benefit from
economic growth. Gold advanced to a record, with futures rising
above $1,300 an ounce.
Oil for November delivery climbed 0.5 percent to $75.56 a
barrel. Copper for December delivery rose 1.65 cents, or 0.5
percent, to $3.607 a pound in New York.
For Related News and Information:
Developed Markets View: DMMV <GO>
Emerging Markets View: EMMV <GO>
World equity valuations: WPE <GO>
World equity index monitor: WEI <GO>
Bonds and Money Markets Page: BTMM <GO>
Cross Currency Rates: FXC <GO>
World Currency Ranker: WCRS <GO>
Market map of today's trading: MXWO <Index> IMAP <GO>
Commodities Prices: GLCO <GO>
--Editors: Michael P. Regan, Dan Hauck.
To contact the reporters on this story:
Michael P. Regan in New York at +212-617-7747 or
Mregan12@bloomberg.net;
Nikolaj Gammeltoft in New York at +1-212-617-1061 or
ngammeltoft@bloomberg.net.
To contact the editor responsible for this story:
Nick Baker at +1-212-617-5919 or nbaker7@bloomberg.net.
