U.S. Stocks Erase Gains on Portfolio Rebalance; Treasuries Rise

Bloomberg (27/11) -- U.S. stocks erased gains as investors sold equities in the final 30 minutes of trading to rebalance portfolios, trimming an earlier rally after improving housing data lifted builders. Treasuries advanced while European stocks fell for the first time in three days.

The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,802.75 at 4 p.m. in New York, after gaining as much as 0.3 percent. The Nasdaq Composite Index closed above 4,000 for the first time since 2000. The Stoxx Europe 600 Index declined 0.6 percent. The yield on Treasury five-year notes slid three basis points to 1.31 percent as the government’s auction of $35 billion in five-year notes attracted stronger-than-forecast demand. Europe’s 17-nation shared currency gained 0.4 percent to $1.3569 and the yen appreciated 0.4 percent to 101.34 per dollar. Oil dropped 0.4 percent to $93.68 a barrel. Home prices in 20 U.S. cities rose by the most since February 2006 in the 12 months through September, indicating the housing market sustained progress even as borrowing costs climbed. Confidence among U.S. consumers unexpectedly declined in November to a seven-month low. More than $8 trillion has been added to the value of global equities this year, the biggest increase since 2009, as central banks took steps to shore up economies worldwide. Stocks pared their gains in the final 30 minutes of trading as investors sold U.S. equities to mimic changes in MSCI indexes that are scheduled to take effect at the end the close today. Apple Inc., Oracle Corp. and Exxon Mobil Corp. are among companies that face the biggest decrease in weighting in the MSCI rebalancing, according to Societe Generale SA. Lennar Corp. and PulteGroup Inc. climbed at least 4.4 percent, leading a rally among homebuilders. Technology shares rose 0.4 percent as a group in the S&P 500. Apple climbed 1.8 percent. China Mobile Ltd.’s selling of iPhone will provide a tailwind to Apple’s 2014 earnings estimates, according to Peter Misek, an analyst with Jefferies LLC.