U.S. stocks erased losses as the cheapest price-to-earnings valuation for the Standard & Poor’s 500 Index in six months overshadowed an unexpected drop in factory orders.
The S&P 500 was up 0.1 percent at 1,279.75 at 2:38 p.m. in New York after falling as much as 0.9 percent.
The S&P 500 started the session trading at 12.9 times its companies reported earnings, the lowest valuation since November. It dropped 9.9 percent from a four-year high on April 2 through last week amid concern Europe’s debt crisis was worsening and global economic growth was slowing.
Earlier losses in U.S. stocks extended the S&P 500’s drop since April 2 to more than 10 percent as government data showed factory orders dropped 0.6 percent in April, pointing to a deceleration in manufacturing, while China’s non-manufacturing industries expanded at the slowest pace in more than a year.
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