BackUS stocks fluctuate as Alibaba rallies; oil declines with gold
The S&P 500 Index rose 0.1% in New York after closing at a record
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New York: US stocks fluctuated near records amid corporate deals, while Alibaba Group Holding Ltd. rallied in its debut. Commodities declined to a five-year low as oil sank and the dollar advanced.
The Standard & Poor’s 500 Index rose 0.1% at 3:02 pm in New York after closing at a record. Alibaba Group Holding Ltd. surged 34% on its first day of trading. The Russell 2000 sank 1.2%. The Bloomberg Commodity Index retreated 0.8% as oil fell. The US Dollar Index rose for a 10th straight week, the longest since at least March 1967, as the yen slid to a six-year low.
Alibaba opened at $92.70 after selling shares at $68 in an initial public offering that raised $21.8 billion, the biggest US IPO ever. US trading may be subject to unexpected swings because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and stocks expire. Trading in S&P 500 stocks was 68% above the 30-day average at this time of day. Scotland’s first minister Alex Salmond resigned after the anti-independence “No" camp garnered 55% of the votes.
“It’s quadruple witching hour," Joe “JJ" Kinahan, chief strategist at TD Ameritrade Holding Corp., said in a phone interview. “Although the headlines are all about BABA, the below-the-surface trading will be centered around expiration for on a lot of products. You may see some added volatility."
Alibaba IPO
The S&P 500 climbed for a third day on Thursday to close at a record, boosted by optimism that the Federal Reserve will keep interest rates low even as the world’s largest economy shows signs of improving. The equities benchmark is heading for a 1.4% advance this week, the sixth in seven.
Data on Friday showed an index of leading indicators climbed 0.2% in August after jumping 0.9% in July. Economists forecast a gain of 0.4%.
Alibaba and shareholders including Yahoo! Inc. sold 320.1 million shares in the Hangzhou, China-based company for $68 each, after offering them at a range of between $66 and $68, according to a statement.
Phone and utility shares rose at least 0.8% to pace gains among seven of the 10 main groups in the S&P 500. Technology shares fell 0.2%. Yahoo retreated 3%.
Among other stocks moving, Oracle Corp. fell 3.8% after naming two co-chief executive officers as Larry Ellison stepped down. Dresser-Rand Group Inc. rallied 10% after people familiar with the matter said Siemens AG is preparing to offer more than $6.5 billion for it. Concur Technologies Inc. jumped 18% as SAP SE agreed to buy the company for $7.4 billion to boost its cloud-computing business.
Quadruple Witching
The operator of the S&P 500 will also rebalance the index in a quarterly move to adjust member weightings. About $25 billion of shares will be traded as investors buy and sell stocks to mimic the changes, according to a 7 September estimate by Howard Silverblatt, an index analyst at the New York-based S&P Dow Jones Indices.
“It’s hard to gauge how things are going to move or why they’re moving with today’s quadruple witching options expiration," Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “Sometimes on days like this things move without reason."
UK shares rose after the Scotland vote that put the future of the 307-year-old union on a knife edge and risked years of political and financial turmoil.
Scotland Vote
The FTSE 100 advanced 0.3% to its highest close since 4 September, when it reached a 14-year high during the day. Royal Bank of Scotland Group Plc advanced 2.5% for the biggest gain in the index. The Stoxx 600 rose for a third day and climbed 1.3% this week.
“Now that the Scotland independence vote is out of the way, risk aversion in asset markets has subsided," said Soeren Moerch, head of fixed-income trading at Danske Bank A/S. “People re-focus on fundamentals. The UK story is now back on growth and its first rate increase."
Spain’s government bonds advanced for a fifth day after the Scottish referendum results eased concern that the Iberian nation’s Catalonia region will break away. Spanish 10-year yields fell eight basis points to 2.20%. The rate on 10- year Italian debt dropped seven basis points to 2.37%.
Dollar Streak
The dollar added 0.2% to ¥108.95 after touching 109.46, the highest since August 2008. It is set to rise for a sixth week, the longest advance this year. The greenback increased 0.7% to $1.2837 per euro, 1% stronger this week. The yen rose 0.4% to 139.84 per euro.
The US Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six US trading partners, increased 0.5%. It has gained 0.6% on the week after the Fed signalled an end to unprecedented monetary stimulus.
Treasury 10-year yields fell three basis points to 2.59%. They earlier touched 2.65%, the highest since 7 July.
The Bloomberg Commodity Index declined to the lowest since July 2009. Wheat fell 2.9% and West Texas Intermediate oil dropped 0.6% to $92.47 a barrel as the dollar rose. Gold dropped 0.9% to $1,216.10 an ounce. Silver tumbled under $18 an ounce to the cheapest in four years.
The MSCI Emerging Markets Index slipped 0.2%, heading for a weekly drop. Currencies weakened as the US moves closer to raising interest rates, damping demand for riskier assets. A gauge of 20 developing-nation currencies slid 0.5% this week, a fifth consecutive decline, to the lowest level since 2009.
The Micex Index fell 1.2%, extending this week’s loss to 1.9% for a second week of declines. The arrest of billionaire Vladimir Evtushenkov sent his holding company, AFK Sistema, to its lowest level since May 2012. Bloomberg
Stephen Kirkland, Anchalee Worrachate and Cecile Vannucci in London and Callie Bost in New York also contributed to this story.
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