Emerging-market stocks soared a second day as the European Union promised emergency support to Ukraine while U.S. and Russian diplomats held discussions. The Standard & Poor’s 500 Index held near a record while oil slumped.
The MSCI Emerging Markets Index inched up 0.3 percent by 4:32 p.m. in New York, even as Russian shares dropped. The S&P 500 relinquished less than one point after achieving an all-time high yesterday. Spain’s two year yield reached 0.67 percent, the weakest performing mark since Bloomberg starting tracking the data in 1993. The yen marched lower to a one-week low against the dollar. Nickel skyrocketed to a nine-month high, while oil gave up 1.8 percent on increasing U.S. supplies.
The EU promised 1.6 billion euros ($2.2 billion) in emergency assistance to aid the Ukrainian government avert a default, even as Russia defied pleas from the West to loosen its control on Ukraine’s southern Crimea region. A report from the Federal Reserve today stated that the U.S. economy in most regions progressed last month even as harsh winter weather affected employment and kept clients away from auto dealerships and stores.
“It’s been an impressively quick rebound from the sober tone that started the week,” Jim Reid, a strategist at Deutsche Bank AG in London, said in a report. “It’s still too early to give the all clear, and with Russian forces reportedly still very much in operational control of the Crimean peninsula we remain largely at the behest of headlines from the Ukraine.”
Russian Foreign Minister Sergei Lavrov stated that the western-backed government in Kiev no longer govern over Crimea and management has shifted to armed “self-defense” groups. U.S. Secretary of State John Kerry warned Russia versus violating “very clear legal obligations” to uphold Ukraine’s unity.
Russian Stocks
Benchmark equity gauges in Taiwan, Turkey and South Korea bolstered at least 0.7 percent. The MSCI All-Country World Index of developed and emerging-market stocks increased 0.1 percent, bringing its two-day increase to 1.4 percent and closing at the topmost performing mark since December 2007.
Russia’s Micex Index sagged down 0.4 percent, leaving the gauge down 6.5 percent this week. Stocks skyrocketed 5.3 percent yesterday, the Micex’s biggest one-day surge since May 2010. The ruble was slightly moved versus the dollar at 36.04 after seesawing between increases and pullbacks the previous two days.
Qatar’s benchmark index relinquished 2.1 percent, the most since August, after three Persian Gulf nations withdrew ambassadors from the gas-rich kingdom amid allegations it meddling in regional affairs. Gulf countries have been critical of Doha’s support for the Muslim Brotherhood.
Risky Assets
Investors are demonstrating confidence in the American economy by pouring cash back into risky assets and out of government securities. BlackRock Inc.’s $13.7 billion exchange-traded fund that focuses on junk bonds reported its largest daily deposit since October yesterday, according to data recorded by Bloomberg. Investors funneled $1.9 billion yesterday into U.S. stocks, which have recovered from a 3.5 percent decline in January.
The S&P 500 (SPX) rallied less than one point to 1,873.81. The Dow Jones Industrial Average gave up 35.70 points, or 0.2 percent, to 16,360.18.
Exxon Mobil Corp. (XOM) surrendered 2.8 percent, the most since November 2012, to lead a gauge of energy producers lower. Target Corp. slide down 1.2 percent in a third day of declines after the retailer’s chief information officer resigned.
Eight of the Fed’s 12 districts “reported improved levels of activity, but in most scenarios the hikes were characterized as modest to moderate,” the Fed said today in its Beige Book business survey. The New York and Philadelphia districts reported sagged downs that were “mostly attributed to the unusually severe weather experienced in those regions.”
Effect of Weather
Investors have been contemplating that recent weakness in data from housing to employment was caused by inclement weather. The Labor Department will disseminate its February jobs report March 7. Economists estimate employers boosted the pace of hiring to 150,000 workers after increasing 113,000 in January, according to a Bloomberg survey.
“Markets are continuing to give a free pass to any weak economic number because of the weather,”Jeffrey Kleintop, chief market strategist at LPL Financial LLC, which manages $414.7 billion, said by phone from Boston. “That could be the case for much of the data we’re going to get through February. Stocks will ignore the data if it’s bad and rally on the number if it’s good.”
