In the U.S.: Stocks, Euro, Commodities Decline on Greek Crisis Concern

16 May 2012


Growth in the U.S.’ real sector spurs on the stock jocks, Treasuries fall.

U.S. stocks advanced, with the Standard & Poor’s 500 Index rebounding from a three-month low, after reports showed housing starts and industrial production rose more than estimated. European stocks swung between gains and losses, commodities fell and Treasuries retreated.

The S&P 500 added 0.4 percent at 9:31 a.m. in New York while the Stoxx Europe 600 Index (SXXP) slipped less than 0.2 percent. The S&P GSCI gauge of 24 raw materials dropped to the lowest in almost five months as oil lost 1.1 percent to $92.92 a barrel. The yield on the 10-year Treasury note jumped four basis points. The Dollar Index (DXY) erased an earlier advance to trade little changed following a record 12 straight days of gains.

U.S. builders broke ground on more homes than anticipated in April and output at factories, mines and utilities increased 1.1 percent, reports showed. European stocks fell earlier on concern a new election in Greece may threaten spending cuts required to secure 240 billion euros ($306 billion) in bailouts. German Chancellor Angela Merkel and French PresidentFrancois Hollande said they would consider measures to spur Greece’s economy as long as voters committed to austerity.

GE Climbs

The S&P 500 rebounded after closing yesterday at the lowest level since February. JPMorgan Chase & Co. and Bank of America Corp. paced gains in financial companies. General Motors Co. climbed as Warren Buffett’s Berkshire Hathaway Inc. disclosed a stake. General Electric Co. rose after saying its finance unit plans to pay a special dividend of $4.5 billion to the parent company. Target Corp., the second-largest U.S. discount retailer, climbed as profit topped estimates.

J.C. Penney Co. (JCP) plunged after the department-store chain reported a first-quarter loss and sales that fell more than analysts projected.

Housing starts rose 2.6 percent to a 717,000 annual rate from March’s revised 699,000 pace that was stronger than previously reported, Commerce Department figures showed. The median estimate of 80 economists surveyed by Bloomberg News called for a rise to 685,000. The Federal Reserve’s report on industrial production showed that gains in auto manufacturing and utility use propelled growth.

The Stoxx 600 has retreated 9.8 percent from this year’s high on March 16. A.P. Moeller-Maersk A/S tumbled 5.7 percent after saying its container line will at best break even this year, falling short of analyst estimates for a profit. Banco Espirito Santo SA,Portugal’s biggest publicly traded lender by market value, sank 6.9 percent as first-quarter profit dropped 84 percent.

The GSCI gauge of commodities dropped 0.5 percent, bringing this year’s decline to almost 2 percent. Gold declined 0.3 percent to $1,539.95 an ounce. Copper slipped 1.1 percent. Palladium dropped as much as 2.3 percent to the lowest since November

The MSCI Emerging Markets Index fell 1.9 percent. The Hang Seng China Enterprises Index of mainland stocks sank 3.4 percent and South Korea’s Kospi index slipped 3.1 percent. The Shanghai Composite Index fell 1.2 percent, and benchmark gauges in India and Hungary lost at least 1.8 percent.

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