U.S. stocks rise to record on Russia-Ukraine cease-fire talks

NEW YORK – U.S. stocks rose, with the Standard & Poor’s 500 Index touching a record, as reports of a cease-fire in Ukraine boosted global equities and data showed orders at American factories rose the most on record in July.

Federal-Mogul Holdings Corp. gained 2.4 percent after agreeing to split into two publicly traded companies. Infinity Pharmaceuticals Inc. surged 42 percent after signing an agreement with AbbVie Inc. for the development and marketing of a cancer treatment. Apple Inc. sank the most since January after rival Samsung Electronics Co. introduced new smartphones.

The S&P 500 added 0.3 percent to 2,007.28 at 10:04 a.m. in New York. The Dow Jones Industrial Average climbed 72.69 points, or 0.4 percent, to 17,140.25. The Nasdaq Composite Index was little changed. Apple is the gauge’s largest member at 8.7 percent. Trading in S&P 500 stocks was 7.9 percent above the 30-day average at this time of day.

“If we can remove one international geopolitical risk, that’s going to provide a boost to the market,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa., said in a phone interview. “That puts a calmer, less volatile market environment in place in the near term.”

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The MSCI All-Country World Index added 0.6 percent, with Russia’s Micex Index rising the most in the world, after President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko agreed on steps toward a cease-fire in Ukraine’s easternmost regions.

Pro-Russian rebels said Poroshenko didn’t agree to a cease-fire with them, RIA Novosti reported.

Positive driver

Ukraine, the United States and Europe accuse Putin of backing pro-Russian rebels with troops and equipment. Russia, which faces further sanctions as early as this week over the unrest, has repeatedly denied involvement.

“The cease-fire in Ukraine is very important,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “People are beginning to wonder whether there will finally be a conclusion to the crisis, and if investors can focus on other factors, like economic indicators and central-bank policy. We have to see what the parties will choose to do, but right now, this is a positive driver.”

The S&P 500 slipped from a record Tuesday, after gaining 3.8 percent in August to breach the 2,000 level for the first time on bets that the Federal Reserve will keep interest rates low even as the economy shows signs of picking up.

Three rounds of stimulus have helped spur economic growth and helped the S&P 500 almost triple from its low in March 2009. The value of U.S. shares rose to a record $23.9 trillion on Aug. 26.

Beige book

The Fed releases its Beige Book, a survey based on reports from the 12 regional banks in the Fed system, at 2 p.m. on Wednesday in Washington, D.C. The report will give policy makers clues about the economy before the Fed’s Sept. 16-17 meeting.

Data Wednesday showed factory goods orders rose 10.5 percent in July, the largest gain since records began in 1992. The increase was less than the 11 percent forecast by economists in a Bloomberg survey.

The economy expanded more than previously forecast in the second quarter, propelled by the biggest gain in business investment in more than two years, the Commerce Department reported last month. A Labor Department report on Sept. 5 will show payrolls rose by more than 200,000 in August for a seventh consecutive month, a Bloomberg survey of economists showed.

The European Central Bank and the Bank of Japan update monetary policy Thursday amid speculation over the outlook for stimulus after disappointing economic reports.

Price swings

The Chicago Board Options Exchange Volatility Index, the gauge of S&P options prices known as the VIX, fell 1.8 percent to 12.03. The gauge lost 29 percent in August, the biggest monthly drop in almost three years.

Nine of the 10 main S&P 500 groups increased, with energy stocks rising 0.8 percent to pace gains.

Infinity Pharma soared 42 percent to $15.56. The company will get $275 million as initial payment under the deal with AbbVie for developing duvelisib and can receive another $530 million depending on the drug’s progress.

Federal-Mogul rose 2.4 percent percent to $17.67. The auto-parts supplier controlled by billionaire Carl Icahn will split into two publicly traded companies, separating its powertrain and motorparts businesses, according to a statement today.

Concur Technologies Inc. jumped 6 percent to $107. The software developer has approached companies including SAP SE, Oracle Corp. and Microsoft Corp. to gauge their interest, the people said. Oracle decided not to pursue a transaction, one of the people said, while another person said Microsoft isn’t interested.

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