Stocks fluctuate as investors weigh ECB stimulus

U.S. stocks fluctuated as commodity prices climbed a sixth day on speculation stimulus in China will boost demand for resources. Brent crude topped $40 a barrel for the first time since December. A rally in raw-material producers offset a decline in technology shares in the Standard & Poor's 500 Index, as the benchmark gauge traded near a two-month higher. Oil advanced as major producers prepared to meet to discuss a production freeze and U.S. drillers cut the number of active rigs to the least in more than six years. Iron ore delivered the biggest one-day gain on record. Treasuries declined, pushing two-year yields to the highest since January, while German bunds climbed on expectations for European Central Bank stimulus measures this week. http://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2016/03/CI10421337.JPG" Global equities have rallied three weeks as investors watch prospects for additional central-bank stimulus closely. Mario Draghi, president of the ECB, is widely expected to deliver a package of easing measures to revive euro-area growth and inflation. Meanwhile, commodities are gaining after China's leaders lowered their goal for economic expansion, saying they are planning a record-high budget deficit as they seek to stoke the world's second-largest economy. “Expectations surrounding the ECB are going to be at play this week,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve of US Bank in New York. “Anxiety will build as we see pressure on that single event. We're likely to see a period of heightened volatility and it's a very frustrating environment. We've become very dependent on monetary support in the absence of fiscal as we've moved from the Fed put to the Draghi put.” EQUITIES The S&P 500 added 0.1% at 12 p.m. in New York, following a four-day rally that had pushed the gauge above its average price for the past 50 and 100 days. The index has jumped more than 9 % from a Feb. 11 low, though it remains down about 2% for the year. Technology and consumer stocks posted the biggest declines out of 10 S&P 500 groups, while energy and raw-material producers were the best performers, with each group jumping more than 1%. Shares with some of the highest short interest rallied. Chesapeake Energy Corp. and Range Resources Corp. were the best performers today with advances topping 10%. The Stoxx 600 declined after its longest run of weekly rallies since October. BASF SE slid after people familiar with the matter said it is considering a counter bid for DuPont Co., which has agreed to merge with Dow Chemical Co. Italian lenders are once again leading declines, with Banca Monte dei Paschi di Siena SpA and Banco Popolare SC falling at least 4.7%. Concern over their bad loans sent them to their lowest prices since at least 2012 last month. COMMODITIES The Bloomberg Commodity Index headed for a sixth day of gains. Brent crude climbed 3.9% to $40.22 a barrel, while West Texas Intermediate climbed 4.2% to $37.41. Speculators reduced their short positions by the most in 10 months in the week ended March 1, Commodity Futures Trading Commission data showed. Iron ore soared the most ever as Chinese support measures boosted the outlook for steel and spurred speculation that some investors who'd bet against the market had been caught out. Ore with 62% content delivered to Qingdao jumped 19% to $63.74 a dry metric ton, data on Metal Bulletin Ltd.'s website show. Copper sank for the first time in a week, losing 0.4%. CURRENCIES The euro fell for the first time in four days as investors braced for the ECB's policy decision. Nearly three-quarters of the economists in a Bloomberg survey predict the central bank will expand monthly quantitative easing, and all but one see the deposit rate being cut further below zero. The shared currency weakened 0.1% to 125.05 yen, while falling to $1.10. A gauge of twenty emerging currencies advanced a sixth day. Colombia's peso and Russia's ruble led gains in currencies, climbing at least % versus the dollar. BONDS Treasury two-year yields climbed four basis points, or 0.04 percentage point, to 0.90%. The extra yield benchmark 10-year Treasuries offer over comparable-maturity German debt widened to the most since January as data indicate a strengthening U.S. economy in contrast with tepid growth abroad. Germany's 10-year yield slid two basis points to 0.22%, while France's dropped three basis points to 0.63%. “Poor risk appetite coupled with the expectation that the ECB will deliver this time is driving bonds up,” said Arne Lohmann Rasmussen, head of fixed-income research at Danske Bank A/S in Copenhagen. EMERGING MARKETS The MSCI Emerging Market Index rose for a seventh day, its longest winning streak since April. Benchmark equity gauges in Russia and Dubai added at least 1.1%. Julius Baer Group Ltd. upgraded emerging stocks from underweight to neutral. Brazil's real fell as economists said this year's recession will be deeper than previously expected, throwing cold water on a four-day rally that sent the currency to a three-month high last week. The real declined 0.5% to 3.7776 per dollar. China's foreign-exchange reserves fell at a slower pace last month as the nation's financial markets stabilized and policy makers took more steps toward shoring up growth. The world's largest currency hoard dropped by $28.6 billion to $3.2 trillion in February, the People's Bank of China said in a statement Monday.