U.S. Stocks Advance as S&P 500 Caps Longest Rally Since June
U.S. Stock-Index Futures Advance; Exxon Climbs
Jeff Kowalsky/Bloomberg
Signs sit on display at an Exxon gas station in Dearborn, Michigan.
Signs sit on display at an Exxon gas station in Dearborn, Michigan. Photographer: Jeff Kowalsky/Bloomberg
Sept. 10 (Bloomberg) -- Jim Bianco, president of Bianco Research LLC, talks about his expectations for the U.S. economy and his investment strategy. Bianco speaks with Carol Massar, Sheila Dharmarajan and Jon Erlichman on Bloomberg Television's "In the Loop." John Brady, senior vice president at MF Global, also speaks. (Source: Bloomberg)
Sept. 10 (Bloomberg) -- James Paulsen, chief investment strategist at Wells Capital Management, talks with Julie Hyman about the outlook for the U.S. economy and markets, and his investment strategy. Paulsen also discusses the significance of the Obama administration's economic initiatives compared with market forces. (Source: Bloomberg)
Sept. 10 (Bloomberg) -- Mohamed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., discusses the Obama administration's efforts to spur U.S. economic growth and the outlook for Treasuries. El-Erian talks with Tom Keene and Ken Prewitt on Bloomberg Radio's "Bloomberg Surveillance." (Source: Bloomberg)
Sept. 10 (Bloomberg) -- Bloomberg's Courtney Donohoe reports on the performance of the U.S. equity market today. Stocks advanced, with the Standard & Poor’s 500 Index capping its first consecutive weekly gains since June, as higher-than-forecast wholesale inventories and surging imports of oil in China boosted optimism about the global economic recovery. (Source: Bloomberg)
U.S. stocks advanced, with the Standard & Poor’s 500 Index capping its first consecutive weekly gains since June, as higher-than-forecast wholesale inventories and surging imports of oil in China boosted optimism about the global economic recovery.
Chevron Corp. and Halliburton Co. rose at least 1.9 percent as crude oil gained the most in six weeks. Moody’s Corp. jumped 5.9 percent after Piper Jaffray & Co. raised its rating on the stock. National Semiconductor Corp. slumped 6.4 percent after forecasting sales that missed analysts’ estimates. Dell Inc. and Adobe Systems Inc. sank at least 2 percent after Morgan Stanley cut its recommendations for the shares.
The S&P 500 rose 0.5 percent to 1,109.55 at 4 p.m. New York time, extending its gain since Aug. 27 to 4.2 percent. The Dow Jones Industrial Average advanced 47.53 points, or 0.5 percent, to 10,462.77. Trading slowed because of the Rosh Hashanah holiday, with fewer than 5.8 billion shares changing hands on U.S. exchanges, the least of 2010.
“Equities are very attractive,” said Warren Koontz, chief investment officer for large-cap value stocks at Loomis Sayles & Co. in Boston, which oversees about $141 billion. “Anything that points towards some type of global growth is positive. We’re in a slow growth, not in a double dip. Given that everybody is crowded on the defensive end of the field, we could have a very powerful rally if sentiment improves.”
Bond Auctions
The S&P 500 yesterday posted its sixth rally in seven days as a decrease in jobless claims and improving demand at European bond auctions tempered speculation that the global economy will slip back into a recession. Concern about the economy has pushed the S&P 500 down 8.9 percent from its 2010 high in April and sent the index to 12 times forecast earnings over the next year, near the lowest since March 2009.
“Stocks are reasonably cheap,” Robert C. Doll, vice chairman at BlackRock Inc., which oversees $3.2 trillion, told Bloomberg Radio. “We need some growth for stocks to go up over the next decade. From this starting point, it’s more likely that we’re going to see some positive returns.”
U.S. equities extended gains earlier after inventories at wholesalers rose in July by the most in two years as a rebound in demand prompted companies to add to stockpiles. The 1.3 percent increase in the value of inventories was three times’ the median estimate in a Bloomberg News survey and followed a 0.3 percent gain the prior month, Commerce Department figures showed. Sales at distributors climbed 0.6 percent, the most since April, after falling 0.5 percent.
Pipeline Shut
A measure of energy shares rose 1 percent, the biggest gain in the S&P 500, as oil surged after a pipeline that carries Canadian crude to refineries in the U.S. Midwest was shut due to a leak and Chinese imports of petroleum doubled.
Oil for October delivery climbed $2.22, or 3 percent, to $76.47 a barrel. Futures touched $76.59, the highest intraday since Aug. 17. Prices have increased 2.5 percent this week.
China’s net crude purchases rose to 20.65 million metric tons from 18.8 million tons in July, according to preliminary data released today by the Beijing-based General Administration of Customs. Net imports of oil products doubled to 490,000 tons.
U.S. stocks followed Asian shares higher after Japan’s gross domestic product grew at an annualized 1.5 percent rate in the three months ended June 30, a Cabinet Office report showed, faster than the 0.4 percent reported last month.
‘Macro Rules’
“The macro rules,” said E. William Stone, who oversees $104 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “You’ve got the underpinnings of some decent macro news today. It’s very positive that you can get some differentiation among equity groups. Hopefully stocks will go back to trading more on their own fundamentals.”
Chevron gained 1.9 percent to $78.82, while Halliburton rose 2.2 percent to $30.88. Schlumberger Ltd. gained 1.3 percent to $59.31. The largest oilfield-services provider was raised to “overweight” from “neutral” at HSBC Holdings Plc.
Moody’s had the biggest gain in the S&P 500, rising 5.9 percent to $24.95. The debt-rating company was raised to “overweight” from “neutral” at Piper Jaffray & Co.
Individuals’ confidence in U.S. stocks soared in the biggest two-week climb since March 2009, as data on employment and manufacturing data beat expectations.
The proportion of respondents who were bullish rose to 43.9 percent, the most since April 15, according to an online survey by the American Association of Individual Investors. The increase from 20.7 percent on Aug. 26 is the largest two-week jump since March 2009, when the S&P 500 started a bull market that lifted it as much as 80 percent.
Semiconductors
A gauge of semiconductor companies in the S&P 500 fell 0.8 percent today. The 30-member Philadelphia Semiconductor Index slumped 1.4 percent.
National Semiconductor declined 6.4 percent to $12.08. The maker of analog chips that control power in electronic devices forecast second-quarter sales of no more than $415 million, trailing the average analyst estimate of $420.6 million in a Bloomberg survey.
Texas Instruments Inc. fell 0.6 percent to $23.70. The chipmaker lowered the upper end of its forecast range for third- quarter profit and sales, indicating semiconductor demand may be slipping. Goldman Sachs Group Inc. reiterated its “buy” recommendation on the shares, saying the market is “wrongly discounting a much-worse-than-seasonal scenario,” according to a report dated yesterday.
Tablet Computers
Dell fell 2.6 percent to $12.06. The world’s third-largest personal-computer maker was cut to “underweight” from “equal- weight” at Morgan Stanley, which cited global PC weakness on tablet devices competition.
Adobe declined 2 percent to $32.20. The biggest maker of graphic-design programs was cut to “equal-weight” from “overweight” at Morgan Stanley.
A gauge of utility companies had the only decline among 10 S&P 500 industries, falling 0.5 percent.
PG&E Corp. dropped 8.4 percent to $44.21. California’s largest utility owner fell after one of its natural-gas pipelines exploded in the San Francisco suburb of San Bruno, killing at least four and destroying 38 homes.
The Securities and Exchange Commission doubled the scope of stock trading curbs to include all companies in the Russell 1000 Index, expanding a program meant to help prevent another plunge like the May 6 rout. The announcement, which also extends coverage to 344 exchange-traded funds, was made in a statement on the regulator’s website. The volatility curbs put in place in June applied only to S&P 500 stocks. The Russell 1000 tracks shares of the biggest U.S. companies.
The pilot program, which is scheduled to last through Dec. 10, was implemented by U.S. exchanges and the Financial Industry Regulatory Authority after the May 6 stock market crash that erased $862 billion in less than 20 minutes. The curb halts a company for five minutes after it rises or falls at least 10 percent within five minutes.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.
Rate These Stories
Rate this Page