U.S. Shares Rise With Dollar as Oil Surges Amid Data 

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U.S. stocks rose toward records, as energy shares rallied with the price of crude and investors weighed data on hiring and the services sector. European equities climbed and the dollar gained on speculation the region’s central bank will add to stimulus.

The Standard & Poor’s 500 Index added 0.3 percent at 10:48 a.m. in New York. A gauge of energy producers jumped 1.4 percent as U.S. crude following a government supply inventories report. The Stoxx Europe 600 Index advanced 0.6 percent. The euro slid to the lowest against the dollar in more than two years, while the greenback advanced to a five-year high versus major peers. Gold rose 0.5 percent.

A private report showed that while employers hired fewer workers than estimated in November, gains topped 200,000 for the seventh time in eight months before a government jobs report on Dec. 5. Service industries in the U.S. expanded last month at the second-fastest pace in more than nine months. Services and manufacturing in the euro area grew less than initially estimated, Markit Economics said today before European Central Bank President Mario Draghi leads a policy meeting tomorrow.

“The market is going to continue to move higher because there’s nothing there to suggest otherwise,” Anastasia Amoroso, global market strategist at JPMorgan Funds, said by phone. The JPMorgan Chase & Co. division oversees about $500 billion in assets. “The catalysts for this week are more tomorrow and Friday. Investors will be clamoring to hear some assurance from Draghi that if needed, he will consider another round of asset purchases.”

Greenback Strength

The S&P 500 closed 0.3 percent below a record reached on Nov. 28 as weaker Black Friday sales and oil prices dragged stocks lower. The gauge has rebounded 11 percent through yesterday from a low in October amid optimism the economy is strong enough to withstand tighter monetary policy.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 trading partners, rose 0.2 percent to the highest since 2009 amid speculation recent data backs the case for higher interest rates as Japan and Europe ease policy.

The dollar added 0.1 percent to 119.33 yen after reaching 119.48, the highest since August 2007. It appreciated 0.4 percent to $1.2333 per euro and touched $1.2321, the strongest level since August 2012. The euro weakened 0.3 percent to 147.20 yen.

Dollar Uptrend

“The dollar’s uptrend is likely to continue and that’s driven equally, if not more, by what’s going on outside the U.S. as well as what’s happening in the U.S.,” said Steven Barrow, head of Group of 10 foreign-exchange research at Standard Bank Plc in London.

Among stocks moving today, Nabors Industries Ltd. and Transocean Ltd. climbed at least 4.5 percent to lead energy shares higher. Amazon.com Inc. slid 3.3 percent and TripAdvisor Inc. lost 1.2 percent.

West Texas Intermediate rose to $67.72 a barrel in New York after an Energy Information Administration report showed inventories dropped as refineries bolstered operating rates. Brent rose for the second time in three days.

“If oil is bottoming and bouncing, this is a heck of a buying opportunity for energy stocks,” Jim Paulsen, who helps oversee $345 billion as chief investment strategist at Wells Capital Management, said by phone from San Francisco. “They are, on a relative value basis, very attractive.”

In Europe, two shares rose for every one that declined in the Stoxx 600. Commodity producers propelled the gauge to within 0.1 percent of a six-year high.

The European equity benchmark has rallied 13 percent from an October low as Draghi said the ECB may broaden its asset-buying program to include government bonds.

QE Option

UBS Group AG said it now expects large-scale quantitative easing in Europe in March as inflation will remain low given the oil price decline, economists led by Reinhard Cluse wrote in a report.

“Everyone wants Draghi to leave the option for QE out in the open,” said Carsten Hilck, who oversees $4 billion as a senior fund manager at Union Investment Privatfonds GmbH in Frankfurt. “Even if he doesn’t make a decisive comment, that will be enough to keep markets happy. He just has to show the gun, but not yet use it.”

Italian 10-year bonds were higher for a fifth day, pushing the yield three basis point lower to 1.98 percent. Spain’s 10-year rate also dropped three basis points, to 1.82 percent.

Emerging Equities

The MSCI Emerging Markets Index added 0.1 percent. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong lost 0.6 percent, while the Shanghai Composite Index increased 0.6 percent.

The ruble strengthened 0.7 percent to 53.40 per dollar after earlier weakening to a record 54.9090. A report today showed Russia’s services activity slumped to a 5 1/2-year low in November.

“It looks like the central bank is back on the market,” Evgeny Shilenkov, head of trading at Veles Capital LLC in Moscow, said by phone.

The currency has depreciated 39 percent this year as sanctions over Ukraine created a dollar shortage and a slump in oil helped send the country toward its first recession since 2009. The Economy Ministry yesterday estimated gross domestic product will shrink 0.8 percent next year, while a former central banker spoke of “some panic” in the financial system.

Copper declined for the seventh time in eight days amid concerns of waning global demand. The metal for delivery in three months dropped 0.6 percent to $6,378 a metric ton on the London Metal Exchange. Aluminum and zinc fell on the LME.

 

Source: Bloomberg – U.S. Shares Rise With Dollar as Oil Surges Amid Data

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