U.S. stocks surged and Treasuries fell as gold rebounded from its biggest slump in three decades in the aftermath of the deadly bombing at the Boston Marathon on Monday.
The Standard & Poor's 500 Index gained 0.5 percent at 9:30 a.m. in New York as the benchmark gauge rebounded from the biggest drop in five months. The Stoxx Europe 600 Index fell 0.1 percent, after losing as much as 0.8 percent. Japan's currency dropped at least 1.3 percent against all 16 of its major counterparts, falling most versus the New Zealand dollar and the Mexican peso. Treasury 10-year note yields climbed four basis points to 1.72 percent, the first increase in four days. Gold jumped 2.5 percent, palladium advanced 3.9 percent and aluminum gained 1.6 percent.
Gold rallied from a two-year low after the biggest selloff since 1983 as investors including
BlackRock Inc.'s Catherine Raw and Sri Lankan central bank Governor Ajith Nivard Cabraal said the decline has led to a buying opportunity. Goldman Sachs, the world's most profitable securities firm before the financial crisis, topped estimates as revenue rose from underwriting stocks and bonds. Coca-Cola reported higher sales volumes in Latin America. A report showed U.S. housing starts climbed as multifamily projects rose to the highest level in more than seven years.
“The outlook for gold for us is really positive in the long term,” Raw, a fund manager in London at BlackRock, which oversees about $3.8 trillion globally, said in an interview today on Bloomberg Television with Francine Lacqua. “The probability of inflation over the next five years is higher not lower than it was last year. Other things such as cash losing money, the Cyprus event, savings being targeted means people are looking for alternatives.”
Gold Climbs
Gold climbed to $1,394.00 an ounce after falling 14 percent the past two days. The drop was triggered by speculation that Cyprus would sell its gold reserves, leading other European central banks to follow suit, Goldman Sachs said in a report today.
Gold is down 28 percent from its record high in September 2011. During its 12-year rally, gold has gained 515 percent, compared with the S&P 500's 8 percent decline. On an inflation- adjusted basis, it's 43 percent lower than the record high.
Silver climbed 3.5 percent to $23.5725 an ounce today, after tumbling 18 percent over two days. Palladium advanced to $678.70 an ounce and aluminum gained to $1,894.50 a metric ton. Palladium declined 11 percent in the past two days and platinum dropped 8.5 percent.
Boston Explosions
The S&P 500 sank 2.3 percent yesterday. The index extended losses during the day as explosions near the finish line of the Boston Marathon killed three people and left at least 128 in the hospital.
Goldman Sachs climbed in pre-market trading after reporting first-quarter adjusted earnings of $4.29 per share, compared with an estimated $3.87. Coca-Cola rose after earnings were 46 cents a share in the quarter, more than a 44 cent estimate. BlackRock Inc., the world's largest asset manager, had earnings of $3.65 per share, compared with an estimate of $3.57.
Of the 41 companies in the U.S. gauge to have reported results this season, 71 percent topped analysts' profit estimates and 56 percent exceeded revenue projections, according to data compiled by Bloomberg. First-quarter earnings at S&P 500 members are forecast to decline 1.4 percent from a year earlier, estimates compiled by Bloomberg show.
--Bloomberg News--
