U.S. stocks rose for a second day as higher oil prices lifted energy shares and Bank of America (BAC) Corp. paced a rebound in lenders, helping the equity market recover from an early slump. Treasuries slid after lower-than-average demand at an auction.
The Standard & Poor’s 500 Index rose 0.2 percent to 1,243.72 at 4 p.m. in New York and the Dow Jones Industrial Average climbed 4.16 points to 12,107.74. Ten-year Treasury yields added five basis points to 1.97 percent. Oil surged as U.S. supplies dropped the most in a decade. The euro lost 0.3 percent to $1.3044 and Italian and Spanish 10-year bond yields climbed at least 18 basis points as stronger-than-forecast demand for European Central Bank loans fueled concern the region’s lenders were struggling to meet funding needs.
The S&P 500 recovered (SPX) from an early 1 percent loss triggered by lower-than-forecast results at Oracle Corp., which tumbled the most in more than nine years. Bank of America climbed after agreeing to a $335 million settlement of a U.S. probe into lending practices at its Countrywide Financial Corp. mortgage unit. Investors also turned their attention to jobless claims data tomorrow after last week’s report showed the fewest applications for unemployment benefits since May 2008.
“It seems to be timed with the Bank of America, Countrywide settlement,” said Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, referring to the stock market’s rebound. “It certainly takes away one bit of uncertainty in the news,” he said. “It seems to us that the settlement with Justice was not excessive at all.”
Bank of America Gains
Bank of America advanced 1.2 percent, erasing an earlier 1.4 percent drop. Countrywide discriminated from 2004 to 2008, before Bank of America acquired the lender, by charging higher fees and interest rates to more than 200,000 black and Hispanic borrowers and steered minority borrowers into subprime mortgages, the DOJ said. Bank of America has committed about $40 billion for mortgage refunds, lawsuits and foreclosures since 2007, with most tied to alleged defects in the loans that affected investors.
The KBW Bank Index of 24 lenders (BKX) advanced 1 percent, adding to yesterday’s 4.1 percent rally.
Exxon Mobil Corp. and Chevron Corp. climbed more than 1.3 percent to pace an advance in 34 of 42 energy companies in the S&P 500. Oil rose 1.5 percent to $98.67 a barrel. Supplies fell 10.6 million barrels to 323.6 million last week, the U.S. Energy Department said. Inventories were forecast to decline 2.13 million barrels, according to the median of 12 analyst estimates in a Bloomberg News survey. Supplies typically fall in December as refiners seek to avoid end-of-year tax liabilities.
Technology companies, which account for 19 percent of the S&P 500 and are the largest group (SPXL1), sank 2 percent to lead declines among 10 industries.
Oracle dropped 12 percent, the most since 2002, after the second-largest software maker’s results were hurt by slower demand for databases, applications and computer servers.
Research In Motion Ltd. advanced 10 percent after the Wall Street Journal said that Microsoft Corp. and Nokia Oyj considered a joint bid for the maker of the BlackBerry smart phone, while Reuters reported that Amazon.com Inc. also considered buying the company.
The S&P 500 is down about 1.1 percent in 2011, having rallied as much as 8.4 percent and lost as much as 13 percent on a year-to-date basis during the year. Financial shares (S5ENRS) have lost 20 percent this year to lead declines.
The S&P GSCI Index of raw materials advanced 1 percent, as energy products and cocoa led gains in 15 of 24 commodities. The Dollar Index, which tracks the U.S. currency against those of six trading partners, rose 0.1 percent after dropping as much as 0.8 percent earlier.
The Stoxx Europe 600 Index dropped 0.5 percent, erasing a gain of as much as 1.4 percent, as technology shares led losses, with SAP AG tumbling 6.1 percent and Cap Gemini SA losing 4.9 percent. Banks lost 0.7 percent as a group, with BNP Paribas down 3 percent and Banco Santander SA falling 1.4 percent.
The ECB awarded 489 billion euros ($645 billion) in loans to the region’s banks in the latest attempt to tame the debt crisis, compared with a median forecast for 293 billion euros in a Bloomberg survey of economists.
“What the ECB is doing is just trying to prevent a disorderly deleveraging of European bank assets,” Barry Knapp, the New York-based head of U.S. equity strategy at Barclays Plc, said in a telephone interview. “By no means it solves the financing problem for Italy or Spain or for the banks.”
The MSCI Emerging Markets Index climbed 1.6 percent. Taiwan’s Taiex Index rallied 4.6 percent, the most since May 2009, after the government said it would allow a state-run fund to buy stocks. South Korea’s Kospi Index advanced 3.1 percent and the won strengthened 0.6 percent against the dollar, erasing losses earlier in the week sparked by the death of North Korean leader Kim Jong-Il.
China’s Shanghai Composite Index retreated 1.1 percent, its third consecutive decline and extending its year-to-date decline to 22 percent, as a gauge of funding availability in the financial system rose, signaling banks were hoarding cash.
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