NEW YORK (Bloomberg) - United States equities climbed as Warren Buffett's bet on Apple Inc. sent the iPhone maker's shares rallying, while crude oil's surge to a six-month high amid speculation a supply glut has eased boosted commodity-producer shares around the world.
The S&P 500 Index rebounded after three weeks of losses, with Apple jumping the most in 10 weeks after Berkshire Hathaway Inc. disclosed a stake. Oil extended last week's gains past US$47 a barrel as Goldman Sachs Group Inc. increased its price forecast, saying the market had moved into a supply deficit earlier than expected. Precious metals rallied with aluminum and materials producers climbed, boosting stocks in developing nations.
The pickup in commodity prices supported global equities after about US$1.8 trillion in value was wiped out in the first two weeks of May amid weaker economic data and disappointing earnings reports. Buffett's bet on Apple lifted its shares from their lowest level since 2014, after they'd slumped on concern over sales growth. Data Friday showing a jump in American retail sales bolstered the case for the Federal Reserveto raise interest rates as other central banks struggle to fuel price growth via stimulus efforts.
"The price of oil and other commodities seem to be catching a bid so there's hope there will be improvement in the industrial side of the economy," Craig Sterling, head of U.S. equity research at Pioneer Investments in Boston, said by phone. "Earnings are over more or less and the market is searching to see what the second half of the year will look like. It was a crazy week last week with retail stocks blowing up and then retail sales overall were strong so there's a little bit of a bounce back right now."
The S&P 500 rose 1 percent to 2,066.66 as of 4 p.m. in New York, rebounding from a third weekly decline, its longest sliding streak since January. The gauge topped its average price during the past 50 days after closing Friday below that level for the first time in two months.
Apple jumped 3.7 per cent after Buffett's Nebraska-based company disclosed a stake in the technology giant worth more than US$1 billion at the end of the first quarter. Yahoo! Inc. rose as people familiar with the matter said Buffett is backing a group bidding for the company's Internet assets.
Anacor Pharmaceuticals Inc. advanced after Pfizer Inc. said it would buythe company. Memorial Resource Development Corp. climbed as Range Resources Corp. agreed to purchase it, while Tribune Publishing Co. surged after Gannett Co. boosted its all- cash offer for the publisher.
The Stoxx Europe 600 Index erased losses to close little changed Monday. German and Swiss markets were among those shut, and the volume of shares changing hands was about 47 per cent below the 30-day average.
The MSCI Emerging Markets Index added 0.2 per cent after falling as much as 0.4 per cent earlier in the session. Benchmark gauges in Russia, Poland, South Africa and the Philippines climbed at least 1 percent. "The firmer oil price is helping emerging-market equities today despite the weaker China data over the weekend," said Michael Wang, a strategist at hedge fund Amiya Capital LLP in London, who favors Indian, Mexican and South Korean stocks.
Futures on Asian equity indexes foreshadowed gains, with contracts on Japan's Nikkei 225 Stock Average rising 1.3 per cent in Chicago. In Australia, futures on the S&P/ASX 200 Index signaled a 0.9 per cent increase, while those on Hong Kong's Hang Seng Index added 0.4 per cent in most recent trading.
Brent oil rose 2.4 per cent to end Monday at US$48.97 a barrel, its highest close since Nov. 3, with data showing China's refineries processed crude at record rates in April, helping ease a supply glut as the number of active rigs in the U.S. declines.
West Texas Intermediate climbed 3.3 per cent to US$47.72 as Goldman Sachs raised its price forecast for the second half to US$50, from a March estimate of US$45.
Gold advanced as holdings in exchange-traded funds backed by the metal climbed for a 14th straight day, reaching the highest point in more than two years. Futures for June delivery rose 0.1 per cent to settle at US$1,274.20 an ounce in New York.
Industrial metals from copper to lead rallied, with nickel up 0.9 per cent in London.
The Bloomberg Dollar Spot Index held near its highest close since March as the greenback gained 0.4 per cent versus the yen. Improved economic data in the U.S. prompted speculation over a potential rate hike this year, possibly as soon as next month. The odds of a Fed rate increase by September are 37 per cent, Fed funds futures show, from 29 per cent a week ago.
The currencies of commodity-exporting countries strengthened as crude prices surged. The Brazilian real, Norwegian krone and Canadian dollar advanced against the U.S. currency as oil gained more than 2 percent.
South Africa's rand fell for a second day after reports that police are set to arrest Finance Minister Pravin Gordhan over alleged irregularities at the nation's revenue service.
Bonds Treasuries fell, sending yields on 10-year notes up by five basis points, or 0.05 percentage point, to 1.76 per cent. The difference between two- and 10-year yields was at the narrowest since 2007, based on closing prices. The spread between the securities was 94 basis points, compared with 122 basis points at the end of last year.
JPMorgan Chase & Co. analysts led by Alex Roever joined a growing chorus of banks paring year-end projections for the 10- year note yield, trimming their estimate to 1.9 per cent from 2.15 per cent.
The Treasury Department has released a breakdown of Saudi Arabia's holdings of U.S. debt, after keeping the figures secret for more than four decades. The stockpile stood at US$116.8 billion as of March, down almost 6 percent from a record in January, according to data the Treasury disclosed on Monday.