Tags: stocks | market | dollar | oil

Stocks Fluctuate, Dollar Gains as Oil Leads Commodity Drop

Tuesday, 30 September 2014 04:33 PM

U.S. stocks were little changed, with global equities poised for the worst quarterly drop since 2012, as energy producers sank with the price of oil to offset a rally in EBay Inc. The dollar extended a four-year high.

The Standard & Poor’s 500 Index lost 0.1 percent at 3:40 p.m. in New York, trimming a seventh quarterly gain. The Bloomberg Dollar Spot Index headed for its best quarter in six years on an eight-day winning streak, and the euro had its worst three-month drop since 2010. European stocks advanced to cap the longest quarterly rally since 2006. Brent crude sank below $95 a barrel for first time in two years while silver plunged to a four-year low. Sovereign bonds beat corporate debt by the most in three years this quarter amid concern higher borrowing costs will slow growth.

Energy producers in the S&P 500 fell 1 percent today as West Texas Intermediate and Brent crudes headed for the biggest quarterly decline in more than two years amid ample supply. EBay Inc. rallied after saying it will split off its PayPal unit. Inflation in the euro region rose in September at a pace less than a quarter of the European Central Bank’s target, fueling speculation officials will boost stimulus when they meet Oct. 2.

“It’s quarter-end, investors are parsing out the economic data and the geopolitical landscape,” said Craig Fehr, Canadian market strategist at Edward Jones on the phone from St. Louis. The firm manages about $800 billion globally. “Investors are trying to digest all of this news and we’re here at the end of the month and end of the quarter so there’s some short-term repositioning in the market.”

World Recap

The MSCI All-Country World Index sank 2.7 percent in the quarter, as gauges of energy and raw material companies lost more than 7 percent to lead declines. Portugal, Austria and Greece fared the worst among developed nations, with their benchmark equity indexes tumbling more than 12 percent in the quarter. Germany’s DAX Index sank almost 4 percent. Turkey, Russia and Taiwan led declines in emerging markets.

In the U.S., the S&P 500 is finishing the quarter near its average price for the past 50 days after dropping under that level for the first time since August on Sept. 25.

The equity benchmark has tumbled 1.3 percent in September, with the Federal Reserve on course to end its monthly bond- buying program in October.

Small-cap stocks led declines today, as the Russell 2000 Index fell 0.9 percent to bring its loss in the July-September period to 7.1 percent, its worst quarter in three years.

Tech Rally

The technology-heavy Nasdaq 100 Index jumped 5.4 percent in the three months, its seventh straight advance and longest quarterly rally since March 2000.

Data today showed the Conference Board’s consumer confidence index fell to 86 in September from 93.4 a month earlier. A separate report indicated home prices in 20 U.S. cities rose in the year ended in July at the slowest pace in almost two years.

Reports on the manufacturing and services industries are due later this week, followed by the government’s monthly labor data. Alcoa Inc. unofficially kicks off the earnings season when it reports quarterly results on Oct. 8.

“There’s just a lot of cross currents out there today,” James W. Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.9 billion, said by phone. “With earnings season looming around the corner, there’s not a lot of impetus to move either way. We could just be taking a pause and waiting for the next catalyst to move us either way.”

Dollar, Crude

The Bloomberg Dollar Spot Index rose for an eighth day, headed for a 6.8 percent gain this quarter, the biggest advance since 2008. The euro earlier today fell to $1.2571, the lowest since September 2012. New Zealand’s kiwi fared the worst among the dollar’s 16 most-traded peers, losing 11 percent in the quarter.

Crude capped quarterly drops in both New York and London as rising output eased disruption concerns that sent prices rising the prior three-month period. West Texas Intermediate tumbled $14.21, or 13 percent, to $91.52 a barrel on the New York Mercantile Exchange this quarter. Today’s settlement was the lowest since May 1, 2013.

Brent fell $17.69, or 16 percent, at $94.67 a barrel on the London-based ICE Futures Europe exchange over the three-month period. The North Sea oil closed today at the lowest level since June 28, 2012.

“We are going to continue to see lower prices as we go forward,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “Fundamentally we are just very well supplied. The dollar continues to get stronger and it’s adding pressure to oil.”

Europe Equities

In Europe, the inflation data fueled bets that the ECB would increase stimulus in an effort to fend off deflation when policy makers next meet. The Stoxx Europe 600 jumped 0.6 percent today, pushing the gauge to a 0.4 percent advance this quarter, its fifth straight. That’s the longest rally since 2006.

Spanish and Italian government bonds rose amid weak inflation, preserving the value of payments on fixed-income securities. German bunds were little changed. Greece’s 10-year yields surged to a four-month high.

“The ECB has done a lot already to stimulate economic activity in Europe,” Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit, said by phone from Hellerup, Denmark. “The most important consequence of the ECB’s measures has been the euro’s decline. You can’t underestimate how beneficial that will be for companies in Europe.”

Russia Controls

U.S. equities sank in early trading while European shares pared gains on a report that Russia’s central bank is weighing the introduction of temporary capital controls, according to two officials with direct knowledge of the matter. The Finance Ministry isn’t discussing such measures, a spokeswoman said.

Russia’s Micex Index added 0.2 percent, paring earlier gains after the report of possible capital controls. The index sank 4.4 percent in the quarter.

The ruble, headed for its worst quarter since 2009, dropped beyond 44.40 against the central bank’s basket of dollars and euros, the level at which policy makers said they would intervene to prop up the currency.

“There’s been some stories going around about Russia freezing U.S. assets and this news seems to be adding fuel to that speculation,” Matt Maley, an equity strategist at Miller Tabak & Co LLC in Newton, Massachusetts, said in a phone interview. “Some companies have a decent amount of assets over there and and it could definitely have an impact.”

The MSCI Emerging Markets Index sank 0.4 percent, with the gauge headed for its worst month since 2012 as Chinese data missed estimates and protests in Hong Kong continued.

The Bloomberg Commodity Index sank 1.4 percent, the most since June. The gauge has plunged 12 percent this quarter, its worst since the final three months of 2008.

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U.S. stocks were little changed, with global equities poised for the worst quarterly drop since 2012, as energy producers sank with the price of oil to offset a rally in EBay Inc.
stocks, market, dollar, oil
Tuesday, 30 September 2014 04:33 PM
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