Bloomberg: U.S. Stocks Rise on Signs of Strong Economy U.S. stocks rose to a record, led by energy and small-cap shares, as data showing improvements in the American economy overshadowed concern over weaker growth overseas. Best Buy (BBY ▲ 6.98% 38.02) Co. jumped 7 percent as demand for televisions and tablets helped the retailer post a surprise sales gain. Dollar Tree Inc. advanced 5.2 percent after reporting third-quarter earnings that beat analysts’ estimates. Energy stocks rose the most of 10 groups in the S&P 500 as crude oil gained for the first time in four days. Intel Corp. led chipmakers higher after raising its dividend. The Standard & Poor’s 500 Index (SPX▲ 0.20% 2,052.75) rose 0.2 percent to a record 2,052.75 at 4 p.m. in New York, erasing an earlier loss. The Dow Jones Industrial Average added 33.27 points, or 0.2 percent, to 17,719, also an all-time closing high. The Russell 2000 Index of smaller companies climbed 1.1 percent. About 5.7 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average. “The swing from this morning was powerful, that shows you there’s strength and the data is quieting market fears about growth,” said Paul Zemsky, the New York-based head of multi-asset strategies at Voya Investment Management LLC, which oversees $213 billion. “We got some concerning numbers out of Europe and softness in China but the data in the U.S. continues to be mixed to better whereas in other places it’s mixed to worse.” Purchases of previously owned U.S. homes unexpectedly rose in October to a one-year high as low borrowing costs helped sustain the recovery in residential real estate. Other data showed fewer Americans filed for unemployment benefits last week as the need to retain staff keeps firings at the lowest levels in more than a decade. Leading Indicators A gauge of U.S. leading indicators widened more than estimated last month, while a Federal Reserve factory index for the Philadelphia region jumped. The economic picture in the U.S. contrasted with weakness in Europe and Asia. A purchasing managers’ index for factories and services activity in the euro area unexpectedly dropped in November, to the lowest level in 16 months, London-based Markit Economics said today. In China, a factory gauge fell to a six-month low this month. The S&P 500 and the Dow have rallied to records as better-than-forecast earningsand data boosted speculation that the economy is strong enough to overcome a global slowdown. The benchmark index has rebounded 10 percent from a six-month low in October and is trading at 17.1 times the projected earnings of its members, the highest multiple since 2009. The Chicago Board Options Exchange Volatility index, the gauge of options prices known as the VIX, declined 2.7 percent to 13.58. Fed Minutes Stocks fell yesterday as minutes from the Fed showed some policy makers were concerned inflation isn’t rising fast enough. Concern economic recoveries from the U.S. to Europe and Japan are failing to spur inflation has been cited by central bankers worldwide as justification for prolonged stimulus efforts. A government report today showed prices in the U.S. excluding fuel and food increased more than forecast in October as a drop in energy costs failed to filter through to other goods and services. The so-called core measure of the consumer-price index climbed 0.2 percent, the most in five months, after rising 0.1 percent in September. Dollar Tree, Best Buy and Gap Inc. were among companies posting results today. Of the S&P 500 companies that have reportedthis earnings season, 79 percent beat profit estimates and 60 percent surpassed revenue projections, according to data compiled by Bloomberg. Holiday Season “The backdrop for holiday sales and retail is setting up to be a very good holiday season,” David Lyon, global investment specialist at JP Morgan Private Bank, which oversees about $1 trillion, said by phone in New York. “That additional cash or income that consumers will have to spend from lower energy prices at least for a quarter or two will be a fantastic tailwind for retailers.” Retailers rallied 0.9 percent. Urban Outfitters Inc. climbed 7 percent to $31.61, the most in the S&P 500. Best Buy jumped 7 percent to $38.02 percent. The world’s largest electronics chain said comparable-store sales -- a closely watched measure -- rose 2.2 percent in the quarter. Analysts had predicted a decline of 2 percent, according to Consensus Metrix. Dollar Tree, which is seeking to merge with Family Dollar Stores Inc., advanced 5.2 percent to $65.87. Keurig Green Mountain Inc. lost 7.4 percent to $142.50, the most in the S&P 500, after Stifel Nicolaus & Co analyst Mark Astrachan said the company’s 2015 outlook for sales and earnings are “modestly disappointing.” Technology, Energy Technology shares increased as Intel added 4.7 percent, the most in the Dow. The world’s largest chipmaker said it will raise its annual dividend by 6.7 percent. Sales in 2015 will rise by a percentage in the “mid-single digits,” in line with analysts’ estimates, as it pushes into markets outside personal computers. Salesforce Inc. slid 4.5 percent to $58.30, the biggest drop since May, after forecasting fiscal fourth-quarter sales and profit and 2016 revenue that may miss analysts’ estimates. Six out of 10 main industries in the S&P 500 advanced. Energy companies had the biggest gains, jumping 1.1 percent, as West Texas Intermediate crude for January delivery climbed 1.8 percent. The energy group has lost 13 percent from a June high after oil collapsed into a bear market. Nabors Industries Ltd advanced 3.5 percent to $16.37 and Chesapeake Energy Corp. climbed 3.9 percent to $23.95.
Posted on: Fri, 21 Nov 2014 10:25:10 +0000
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