Stocks rise as consumer confidence climbs, treasuries advance

U.S. STOCKS rise as consumer confidence climbs. Shoppers walk around the Mall of America in Bloomington, Minnesota, U.S. / BLOOMBERG FILE PHOTO/ARIANA LINDQUIST
U.S. STOCKS rise as consumer confidence climbs. Shoppers walk around the Mall of America in Bloomington, Minnesota, U.S. / BLOOMBERG FILE PHOTO/ARIANA LINDQUIST

NEW YORK – U.S. equities rose, trimming a weekly loss, as an unexpected increase in consumer confidence and rally in technology shares overshadowed JPMorgan Chase & Co.’s $2 billion trading loss.

Treasuries headed for the longest run of weekly increases since Russia’s 1998 default.

The Standard & Poor’s 500 Index increased 0.3 percent to 1,362.26 at 11:54 a.m. in New York after retreating as much as 0.7 percent. Gains in 10-year Treasury notes sent yields down two basis points to 1.85 percent, poised for an eighth weekly decline. The S&P GSCI Index of commodities fell for an eighth day, its longest slump since December 2008.

The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to a three-year high of 77.8, helping stocks recover from an early slump led by banks following what JPMorgan Chief Executive Officer Jamie Dimon called an “egregious” failure in trading of synthetic credit securities. Nvidia Corp. jumped 8.8 percent as its sales forecast topped estimates amid demand for graphics and cell-phone chips.

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“The U.S. economy is doing OK, corporate earnings continue to impress, but there’s a lot of headline risk in financials,” Stephen Wood, the New York-based chief market strategist for Russell Investments, said in a telephone interview. His firm oversees $140.8 billion. “There will be volatility.”

The S&P 500 trimmed its weekly loss to less than 0.3 percent. Technology shares rallied 0.9 percent as a group and contributed the most to the advance as all 10 industries in the S&P 500 increased except for financial companies. Intel Corp. and Microsoft Corp. rose more than 2 percent to lead gains in the Dow Jones Industrial Average, which rose as much as 63 points.

JPMorgan Tumbles

JPMorgan pared losses after declining as much as 9.9 percent. The bank’s chief investment office, run by Ina Drew, took flawed positions on synthetic credit securities that remain volatile and may cost the lender an additional $1 billion this quarter or next, Dimon said yesterday in a conference call with analysts. The loss originated out of the firm’s London CIO unit, an executive at the bank said.

U.S. lawmakers and interest groups favoring tighter restrictions on proprietary trading said JPMorgan’s loss bolsters their case.

Senator Carl Levin, the co-author of the so-called Volcker rule and chairman of the Permanent Subcommittee on Investigations, said the disclosure served as a “stark reminder” to regulators drafting the proprietary- trading ban required by the 2010 Dodd-Frank Act. Treasury Yields

Ten-year Treasury yields approached three-month low after German Finance Minister Wolfgang Schaeuble suggested the euro area could handle Greece dropping out.

Thirty-year bonds gained as wholesale inflation declined last month before the Federal Reserve buys as much as $2 billion of longer-term securities.

Average estimates for 10-year Treasury yields three months from now are at 1.99 percent, 24 basis points lower than expectations in April, according to a survey from Citigroup Inc, published yesterday.

The Stoxx Europe 600 Index rose 0.4 percent, erasing a loss of as much as 1.2 percent. The regional benchmark fell 0.4 percent this week as Greece’s struggles to form a government revived concern about the nation’s debt crisis. The euro was little changed at $1.2931 after earlier touching the weakest level since January.

Emerging Markets

The MSCI Emerging Markets Index lost 0.8 percent, extending declines from this year’s March 2 high to almost 10 percent, the level that some investors consider to signal a correction.
The Hang Seng China Enterprises Index slumped 1.4 percent. India’s Sensex Index slipped 0.8 percent as production at factories, utilities and mines
declined in March.

The S&P GSCI gauge of 24 commodities dropped 0.3 percent, leaving it little changed for the year. Cotton tumbled to a 21- month low. Gold futures were down 0.7 percent at $1,584.60 an ounce. Copper declined 1 percent. Oil was down 0.3 percent, paring losses after falling as much as 1.5 percent in New York

Germany’s 10-year bund yield fell two basis points, while the yield on Greece’s 10-year note advanced 57 basis points, climbing for the ninth straight day. Greek political leaders go into a fifth day of talks today with Evangelos Venizelos, the socialist Pasok leader, set to press for a unity government that would avert a new election.

Antonis Samaras, head of the New Democracy party, said today his sole condition for supporting a coalition government is that it guarantees Greece’s membership of the euro area.

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