Euro Strengthens to Three-Week High as Oil Advances
The euro rose to a three-week high and commodities climbed after German business confidence unexpectedly rose. Technology stocks led U.S. shares higher, sending the Standard & Poor’s 500 Index (SPX) to its biggest weekly rally since June, as the holiday shopping season got under way.
The euro advanced 0.7 percent to $1.2976 as of 3:26 p.m. in New York and reached the highest level since Nov. 1. The S&P 500 added 1.3 percent to 1,409.15. The U.S. stock market shut at 1 p.m. today and was closed yesterday for Thanksgiving. The S&P GSCI gauge of 24 raw materials increased 0.6 percent. Oil gained 90 cents to $88.28 a barrel in New York and gold topped $1,750 a ounce. Brazil’s Bovespa gauge rallied 2 percent.
The Munich-based Ifo institute said its business climate index climbed to 101.4 this month, compared with an estimated reading of 99.5 based on the median of 48 forecasts in a Bloomberg survey. Stocks have rallied this week as data from the U.S. and China added to signs the world’s two largest economies are recovering. Euro-area finance ministers will meet Nov. 26 to discuss aid to Greece after leaders failed to agree the bloc’s next seven-year budget at a summit in Brussels.
“We’re seeing a little better tone with consumers over the last few months and I think that’s going to lead to a reasonable Christmas season,” Bill Greiner, who oversees $14 billion as chief investment officer at Mariner Wealth Advisors in Kansas City, Missouri, said in a phone interview. “That’s going to give people some lift during December that the consumer is back in full swing.”
Hewlett-Packard Co., Dell Inc. and Advanced Micro Devices Inc. climbed more than 4 percent to pace rallies among technology companies. Research In Motion Ltd. jumped 14 percent in U.S. trading today after an 18 percent advance in Toronto yesterday on optimism over the BlackBerry maker’s newest smartphones. Macy’s Inc. and Bed Bath & Beyond Inc. added at least 1.7 percent as retailers hold Black Friday sales.
The Stoxx Europe 600 Index (SXXP) rose 0.6 percent. The euro gained against 11 of its 16 main counterparts. Europe’s shared currency may climb to its September high against the dollar of $1.3172 should it rise above the Oct. 31 high of $1.3021, analysts at Landesbank Hessen-Thueringen in Frankfurt including Ralf Umlauf wrote in a note to clients.
European Union leaders failed to agree on the bloc’s next seven-year budget, forcing them to hold another summit next year to seal the deal. The conflicts at the EU chiefs’ two-day meeting in Brussels that ended today offered a 27-nation re- enactment of the rancor that has marked the debt crisis in the 17-nation euro region.
Greek 10-year bonds fell for the first time in 11 days, pushing the yield nine basis points higher to 16.48 percent. The 10-year Treasury yield was little changed at 1.68 percent.
“Overall market activity is subdued following the holiday in the U.S. and as investors wait for a solution to Greece’s debt problem,” Monthol Junchaya, chief investment officer at Bangkok-based One Asset Management Ltd., which manages about $2.3 billion of assets, said by phone today.
The S&P 500 rallied for five days in the longest winning streak since August amid better-than-forecast housing data and as President Barack Obama expressed confidence on a budget agreement with Congress. Obama met with senior Democrats and Republicans on Nov. 16 for talks to avoid $607 billion of automatic tax increases and spending cuts that, if allowed to come into force, might push the country into a recession next year. Congress is in recess for Thanksgiving until Nov. 26.
Gold futures for December delivery rose 1.3 percent to $1,751.40 an ounce. Silver futures for March delivery gained 2.3 percent to $34.206 an ounce. Earlier, the price reached $34.25, the highest since Oct. 11.
The Taiex index jumped 3.1 percent after the Central News Agency cited Taiwan’s finance minister as saying state- controlled funds should buy stocks. The trading volume on Taiwan’s benchmark equity gauge was 73 percent higher than the 30-day average, according to data compiled by Bloomberg.
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