May 1 (Bloomberg) -- Commodities jumped the most in four weeks, led by grains and energy, as signs of improving economic conditions boosted speculation that demand will strengthen for raw materials. Equities also climbed.
The Reuters/Jefferies CRB Index surged 3 percent, the most since April 2. Wheat soared 6.2 percent, the most in five months. Crude oil climbed 4.1 percent.
U.S. consumer sentiment last month unexpectedly advanced to the highest level since the credit crisis intensified in September, an industry report showed today. Manufacturing in China expanded for a second straight month in April.
“More sentiment change toward the economy has been driving these prices,” said Evan Smith, who helps manage $2 billion at U.S. Global Investors in San Antonio. “The manufacturing numbers have been a catalyst for someone who’s been sitting on cash to start putting money to work in these markets again.”
The CRB index gained 6.65 to 299.04. Sixteen of 19 components in the gauge climbed. The UBS Bloomberg Constant Maturity Commodity Index rose 3.5 percent to 964.9.
The gain in equities capped a weekly advance. Consumer confidence and manufacturing jumped to their highest levels since September, signaling the worst of the recession may be over.
Exxon Mobil Corp. led a gauge of energy shares to the steepest increase in the Standard & Poor’s 500 Index as oil rallied. Alcoa Inc., Caterpillar Inc. and Boeing Co. climbed at least 3 percent to lead the advance in the Dow Jones Industrial Average.
‘Less Bad’
“Economic data is getting less bad and investors have begun to realize this,” said Philip Orlando, who helps manage $410 billion as chief equity strategist at Federated Investors Inc. in New York. “First-quarter earnings season has been phenomenally strong. We thought it was going to be an absolute disaster.”
The S&P 500 added 0.5 percent to 877.52, giving it a 1.3 percent gain for the week. The Dow rose 44.29 points, or 0.5 percent, to 8,212.41.
The yen declined to a two-week low against the euro while the dollar dropped as signs of recovery in manufacturing in the U.S. and China sapped demand for the currencies as a refuge.
Higher Yields
Australia’s dollar rose for a ninth week against the greenback and the rand gained today versus all of its major counterparts on speculation investors will buy higher-yielding assets. The dollar advanced against the yen as the yield premium of 10-year Treasuries over comparable Japanese debt increased this week to the highest level since November.
The euro rose 1 percent to 131.77 yen in New York, from 130.52 yesterday, and reached 132.35, the highest level since April 14. The yen declined 0.7 percent to 99.30 against the dollar, from 98.63. It touched 99.58, the weakest level since April 17. The euro appreciated 0.3 percent to $1.3270 from $1.3230.
Treasury 10-year notes fell for a sixth consecutive week, the longest streak of weekly losses in almost two years, as speculation grew that the worst of the recession may be over.
The 10-year note yield rose five basis points, or 0.05 percentage point, to 3.16 percent, according to BGCantor Market Data. The 2.75 percent security maturing in February 2019 fell 3/8, or $3.75 per $1,000 face amount, to 96 18/32.
The Treasury plans to sell record amounts of securities, including $71 billion of notes and bonds next week, to finance a widening budget deficit, bank bailouts and fiscal recovery packages.
No comments:
Post a Comment