U.S. equities rose, sending the Standard & Poor’s 500 Index above its record closing level and erasing its 2014 decline, amid confidence the economy is strong enough to weather reductions in monetary stimulus. Industrial metals fell while Ukrainian shares jumped the most since 2010.

The S&P 500 advanced 0.8 percent to 1,851.45 at 10:35 a.m. in New York to exceed its last record close on Jan. 15. The MSCI Emerging Markets Index slipped 0.2 percent and The Stoxx Europe 600 Index added 0.3 percent. The Ukrainian Equities Index jumped 15 percent on speculation the country will get international financial aid. Treasury 10-year note yields traded in the narrowest range in four months. Coffee, sugar, silver and gold rose at least 1 percent to lead commodities higher.

Janet Yellen, in her first global forum as Federal Reserve chair, won praise at the Group of 20 nations meeting over the weekend for helping ease concerns about emerging markets as the U.S. tapers monetary stimulus. Industrial Bank Co. and other unidentified lenders have curbed loans to the property sector and related industries such as steel and cement, Shanghai Securities News reported. The U.S. and the European Union said they are ready to aid Ukraine as lawmakers in Kiev work to set up a coalition government.

“The market is really willing to focus on the positives and dismiss the negatives,” Mark Freeman, who oversees about $18.9 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said by phone. “We’re just seeing a shift in mentality. The market is on the forward basis operating on the assumption that the economy is going to continue to improve and corporate profits are going to continue to grow at some rate.”

Retreat, Recovery

The S&P 500 slumped as much as 5.8 percent after reaching the highest level since its inception on Jan. 15 as investor concern about continued cuts in the Fed’s monthly asset purchases fueled a rout in emerging markets. The index has rebounded from its low on Feb. 3 and climbed to within six points of the previous 1,848.38 record close on each day last week, without breaking through to a new high until today.

Energy, industrial and health-care stocks led gains in eight of the 10 main industry groups in the S&P 500 today, with telephone and commodity companies leading declines.

Comcast Corp. advanced 1.2 percent after people familiar with the matter said Netflix Inc. agreed to pay for direct access to the cable company’s broadband network. Netflix gained 1.3 percent.

‘Main Risk’

The Shanghai Composite Index dropped 1.8 percent, the most since Jan. 6, and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell 1.4 percent.

“China is the main risk for EM assets,” Maarten-Jan Bakkum, an emerging-markets strategist at ING Investment Management Co. in The Hague, said by e-mail. “Slower growth in Chinese real-estate investment would have a big impact on Chinese growth and on EM growth as the emerging world is very dependent on Chinese demand.”

The world’s major economies pledged to maintain generally accommodative policies and pay heed to the international repercussions of their actions. Before the Group of 20 nations’ concluding communique was released yesterday in Sydney, India and South Africa were among nations calling for the Fed to consider spillovers as it tapers its monthly asset purchases.

Officials from the U.K. and Australia had backed the Fed’s right to set policy to its own needs and said some were using the impact of tapering as an excuse for domestic failings.

Ukraine’s April 2023 dollar bonds rose for a third day, sending the yield down 1.04 percentage points to 9.10 percent, the lowest in about a month. The country’s interim government said it needs $35 billion of aid to avoid default as it issued an arrest warrant for fleeing President Viktor Yanukovych for his role in last week’s violence.

HSBC Earnings

HSBC Holdings Plc dropped 3.5 percent after Europe’s largest bank reported full-year pretax profit that missed analysts’ estimates. PostNL NV lost 20 percent after the Dutch mail service posted a full-year loss that was wider than forecast. RSA Insurance Group Plc slid 4.1 percent after the U.K. company said it is considering a rights offer.

Volkswagen AG tumbled 7.6 percent after offering to buy the remaining stake in Swedish truckmaker Scania AB for 6.7 billion euros ($9.2 billion). Scania soared 32 percent to its highest price since July 2007.

Coffee extended a rally in New York as dry weather may cut output in Brazil, the world’s largest producer, potentially tipping the global market into the first shortage in four years. Sugar advanced and cocoa retreated.

Gas, Copper

U.S. natural gas turned lower, slipping 3.9 percent after rallying as much as 5.8 percent to the highest since December 2008. Meteorologists are monitoring the possibility of “returning disruptive snow to the Northeast,” AccuWeather Inc. said in report yesterday. West Texas Intermediate oil was little changed at $102.49 a barrel.

Copper fell 1.2 percent to $7,070 a metric ton in London. Gold climbed 0.9 percent to $1,336.19 an ounce, a third consecutive advance.

The euro weakened against 13 of its 16 major peers as reports showed euro-area inflation stayed below the European Central Bank’s 2 percent target for a fourth month.

The average yield on junk-rated corporate bonds in euros fell to a record 4.5 percent, while the yield on investment-grade debt dropped to 1.9 percent, approaching the lowest since May 31, according to Bank of America Merrill Lynch index data.

The cost of insuring high-yield corporate bonds in euros against losses fell to the lowest since October 2007, with the Markit iTraxx Crossover index of credit-default swaps on 50 European companies with speculative-grade ratings dropping 3.8 basis point to 274 basis points.

Source: Bloomberg (by Stephen Kirkland and Lu Wang)