World stocks record biggest rally of the year
Gold jumped to a record as the dollar slid.
The MSCI World Index jumped 1.9% in New York, the biggest increase since December 1, and emerging-market shares rallied the most in 10 months.
The Standard & Poor’s 500 Index climbed 1.3%. The US currency weakened versus all 16 major peers, dragging the Dollar Index to the lowest since 2009. Ten-year US Treasury yields rose four basis points to 3.41%. Sugar and nickel led commodities higher and gold traded above $1,500 an ounce for a second day.
Technology shares led gains after Intel said late yesterday that revenue may top analysts’ estimates in the second quarter. L’Oreal, the world’s largest cosmetics maker, reported that sales climbed 9.3% and South Korea’s LG Chem Ltd posted a 27% jump in profit.
Earnings-per-share exceeded predictions for 78% of the 58 companies in the S&P 500 that reported results since April 11, helping revive investor confidence after S&P cut its rating outlook for US debt on April 18.
“The risk-on trade is in full-blown mode,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott, which manages $53bn.
“The surprise factor was sort of being lost in the market. The good corporate earnings across the board reinforce the idea that the global recovery is in place. As a consequence, equities and commodities are feeling the benefits of that.”
The S&P 500 climbed for the fifth time in six days and erased its plunge on April 18. Intel surged 6.7%, the most in almost two years on a closing basis. Yahoo climbed 4.7% as the most-visited US web portal had first-quarter sales that topped estimates. Apple, the maker of the iPhone climbed 1.5%.
United Technologies, maker of Carrier air conditioners and Pratt & Whitney engine parts, surged 5.1% to $86.59, its highest price since at least 1980. Intel and United Technologies led the Dow up 181.27 points, or 1.5%, to 12,448.02, above its highest closing level since June 2008.
Stocks extended gains after sales of previously owned US homes increased 3.7% to a 5.1 million annual rate in March, exceeding the 5 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed. The median price declined from a year earlier, and 40% of the sales were distressed properties.
The Stoxx Europe 600 rose 1.7%, the most in a month. STMicroelectronics, Europe’s biggest chipmaker, climbed 5% and ASML Holding, the largest semiconductor-equipment maker, jumped 5.3%. Gold for June delivery rallied as much as 0.8% to a record $1,506.50 an ounce.
The euro strengthened 1.2% to $1.4508, its highest level since January 2010.
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