(MENAFN- Gulf Times) US stocks rose, sending the Russell 2000 Index to an all-time high, and precious metals advanced.
The rouble fell, trimming its biggest weekly jump since 1998, while Russian shares climbed for a third day.
The Standard & Poor's 500 Index added 0.4% to a record at 11:29am in New York, and the Russell 2000 jumped 0.6% to top its March high. Gold advanced 1.8% and silver jumped the most since December 9. Natural gas futures fell below $3 per million British thermal units for the first time since 2012. The rouble slipped 1.7%, while the Micex Index increased 0.7%.
Equity markets are rising this week, and US stocks have regained their losses from earlier this month, with the Dow closing above 18,000 and the Nasdaq Composite Index poised for a 14-year high. The rouble is headed for its first weekly advance in a month amid speculation the government is ordering exporters to sell foreign currency.
Most markets in Europe and Asia were shut yesterday for Boxing Day, while the US reopened after the Christmas holiday. Trading in S&P 500 stocks was 65% below the 30-day average at the time of filing this report.
"We're definitely seeing the psychology turn around and people's risk appetite grow," Ethan Anderson, a senior portfolio manager at Rehmann Financial in Grand Rapids, Michigan, said by phone. His firm oversees $1.5bn. "When we had the S&P 500 hitting a record last year, you had people coming in very suspicious as to whether or not the economy could keep going. Now we hit the end of this year, people want to get aggressive, they want to put more into the market."
US stocks recovered losses from earlier this month as the Federal Reserve said it will be patient on the timing of interest-rate increases and the US economy expanded at the fastest pace in more than a decade. Both the S&P 500 and the Dow are trading at records. The Dow has risen for seven days in its longest rally since March 2013.
The S&P 500 has advanced 0.9% this week, while the Dow is up 1.5% and the Russell 2000 has gained 1.5%.
The small-cap gauge has shown resilience this year, recovering from a correction that saw it slip 11% over a five-week period starting in early September. The index has surged 16% since reaching a one-year low on October 13. Short interest in the iShares Russell 2000, an exchange-traded fund tracking the benchmark small company index, is the lowest in 17 months.
Even with its 4.3% gain in 2014, the Russell still trails the S&P 500, which has climbed 13%. The Dow has increased 9.1% year-to-date.
"Momentum has been building in the last month for small-cap names," Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc, said by phone on December 24. "It's merely playing catch up. Given that the Russell has lagged through this year, people are trying to find beta for performance."
It hasn't been a smooth year for the index. The gauge lost 2.8% over a three-day period starting July 15 after the Federal Reserve expressed concern about valuations among social media and biotech companies.
"Valuation metrics in some sectors do appear substantially stretched - particularly those for smaller firms in the social media and biotechnology industries," the central bank wrote in assessing the US stock market.
The Fed's concern came after small-caps and Internet shares were the biggest victims of a market retreat early in the year as investors dumped the best performers of the bull market.
Small-cap shares also fell faster than the broader market during an August selloff sparked by concern that a bear market in oil prices and slowing growth in China and Europe would hurt the US economy.
The MSCI All-Country World Index rose 0.3% yesterday and has climbed 0.8% this week.
West Texas Intermediate crude fell 0.3% after earlier rising. The gauge is heading for its 12th weekly decline in the past 13.
"That the US recovery is on firmer ground amid a 'patient' Fed is buoying sentiment towards risk assets further," Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, wrote in an e-mail.
"However, trading is thin and one shouldn't read too much into this rally - not least given the risk of a further slide in oil prices and the plethora of risks in emerging markets, in particular Russia."
Natural gas futures fell on speculation that record production will overwhelm demand for the heating fuel.
Futures have slid 29% this year, heading for the first annual decline since 2011, as mild weather leaves stockpiles at a surplus to year-ago levels for the first time in two years.
Gold futures advanced the most in more than two weeks amid speculation that China, the world's biggest consumer, will take more measures to bolster the economy, boosting demand for the precious metal as a store of value.
Silver futures for March delivery rose 2.8% to $16.15 an ounce. The price has declined 17% this year.
The dollar strengthened 0.4% versus the euro, taking the US currency up for a second week.
The rate on 10-year Treasuries slipped one basis point to 2.25%. The extra yield on the 30-year debt over five-year notes shrank to a six-year low in Asia after declining oil prices spurred speculation that inflation will slow, fuelling demand for longer maturities.
The rouble earlier rose as much as 1.7% against the dollar. It's advanced about 9% this week as companies made year-end tax payments and the government ordered exporters including OAO Gazprom to sell foreign-exchange revenue.
"Exporters have to sell, and while volumes aren't that large, it's enough to move this thin market," Iskander Abdullaev, analyst at Sberbank CIB, said in e-mailed comments. "I think there was an instruction to calm down the rate until the end of the year, so that retail clients don't panic before holidays, and take off pressure from the ruble."
Russia's benchmark stock index fell 2.2% in the five days for its fifth weekly drop, the longest streak since June 2013.
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