Stocks fluctuate with dollar; oil, natural gas lead resources

BLOOMBERG

U.S. stocks fluctuated near the highest levels of the year, while the dollar and Treasuries were little changed as investors assessed the potential for central-bank stimulus to boost flagging global growth.
The Standard & Poor’s 500 Index edged higher after a sixth weekly gain in seven, while European and Asian equities climbed from the lowest levels in at least three weeks. The dollar fluctuated after five days of losses, while the yield on 10-year Treasury notes held near 1.78 percent. Natural gas surged amid a cold snap in the eastern U.S. and crude erased losses to trade above $37 a barrel.
U.S. stocks climbed the most in a month last week after Federal Reserve Chair Janet Yellen reaffirmed any interest-rate increases will be gradual even as jobs and manufacturing data signaled the economy continues to strengthen. The European Central Bank will continue to act “forcefully” if needed, Executive Board member Peter Praet said on Monday.
“When the market extends like this day by day without big gains it tends to frustrate people on both sides of the fence,” Frank Cappelleri, executive director at Instinet LLC in New York, said by phone. “Up to this point the market has been able to absorb any kind of news headline that’s come out, whether it’s micro or macro and as we extend higher there’s going to be more potential for factors that will cause this to roll over.”

Stocks
The Standard & Poor’s 500 Index added less than 0.1 percent at 10:09 a.m. in New York. The main U.S. equity benchmark extended 2016 gains to 1.4 percent on Friday after reports showed the pace of job creation remained robust and manufacturing activity improved, bolstering confidence in the economy while central banks have signaled they will continue their efforts to support growth.
The S&P 500 staged a rebound in the second half of the last quarter, erasing losses of as much as 11 percent, helped by a rally in crude oil and easing concerns that a global slowdown will deepen.
Tesla Motors Inc. rose after Chief Executive Officer Elon Musk said pre-orders for its Model 3 electric car reached 276,000 by Saturday night. Virgin America Inc. surged 40 percent in early New York trading after Alaska Air Group Inc. agreed to buy it.
The Stoxx Europe 600 Index added 0.6 percent, and the MSCI Asia Pacific Index increased 0.3 percent. The rebound in European shares has stalled for more than two weeks. With a valuation of about 14.7 times estimated earnings, the Stoxx 600 traded at its lowest level since January 2015 relative to the S&P 500 on Friday.
Health-care stocks and utilities led the advance in the Stoxx 600, with trading volume 19 percent less than the 30-day average. Orange SA lost 4.6 percent and Bouygues SA plunged 15 percent after a merger deal between the two collapsed, denying a consolidation that would have eased competition. Peer Altice NV tumbled 15 percent.
Greece’s ASE Index lost 1.6 percent after International Monetary Fund Managing Director Christine Lagarde said the IMF is “a good distance away” from an agreement that would allow for additional loans to Europe’s most indebted state. Bonds dropped, sending two-year yields up 219 basis points to 11.10 percent.

Emerging Markets
The MSCI Emerging Markets Index rose 0.3 percent, rebounding from a 1.3 percent drop on Friday, its worst one-day slide in more than two weeks. Technology and health-care stocks led the advance while energy producers declined. Markets were closed in China, Hong Kong and Taiwan for holidays.
The Borsa Istanbul 100 Index rose 1.5 percent and the yield on two-year notes slide seven basis points to 9.9 percent. Turkish inflation dropped more than forecast, giving the central bank more room to keep cutting rates.

Commodities
Brent crude slipped 0.7 percent to $38.43 a barrel, after falling as much as 1.4 percent. West Texas Intermediate crude decreased 0.4 percent to $36.65 a barrel.
Copper dropped 0.7 percent on the London Metal Exchange. Chile’s Codelco has warned it doesn’t see a recovery starting until 2018 and Barclays Plc analysts reiterated their bearish outlook on Monday. Weaker currencies in producer nations and lower oil prices are helping suppliers trim costs, curbing the need to make output cuts, according to Societe Generale SA.

Bonds
Treasuries were little changed, with 10-year note yields at 1.77 percent. The rate on benchmark German bunds was also little changed, at 0.14 percent.
Australian government notes gained, with yields on debt due in a decade down six basis points to 2.47 percent. Rates on similar-maturity Japanese bonds fell 1.5 basis points to minus 0.085 percent.
The difference between yields on 30-year bonds and similar-maturity Treasury Inflation Protected Securities has widened to 1.8 percentage points from as low as 1.4 in February. The gauge, which measures trader expectations for consumer prices over the life of the debt, is still less than the average of 2.3 for the past decade.
Morgan Stanley recommended TIPS, saying the Fed is “decidedly dovish,” as amid growing speculation inflation will pickup.

Currencies
The Aussie weakened 0.6 percent to 76.28 U.S. cents, after climbing 2.3 percent last week. Retail sales were little changed in February from a month earlier, a report showed, missing economists’ forecast for a 0.4 percent gain. The nation’s central bank reviews monetary policy on Tuesday, when it’s expected to hold borrowing costs at a record low.
The yen was little changed at 111.52 per dollar after jumping 0.8 percent on Friday amid the greenback’s retreat. The won strengthened 0.7 percent.
The ruble sank 0.5 percent, falling for a second day, and Brazil’s real slipped 0.4 percent.