U.S. stocks rose, trimming the biggest weekly drop since June in the Standard & Poor’s 500 Index, as data showing consumer confidence climbed to a five- year high offset concern about fiscal cliff negotiations.
Boeing Co. (BA), Caterpillar Inc. (CAT) and AT&T Inc. (T) advanced at least 1 percent to pace gains among the largest companies. Apple Inc. (AAPL), the world’s most valuable company, increased 1.7 percent after an 8 percent plunge over the previous three days. J.C. Penney Co. (JCP) dropped 4.8 percent after reporting a third-quarter loss that was larger than analysts had estimated.
The S&P 500 gained 0.2 percent to 1,379.85 at 4 p.m. New York time. It fell 2.4 percent this week. The Dow Jones Industrial Average added 4.07 points, or less than 0.1 percent, to 12,815.39. Volume for exchange-listed stocks in the U.S. was 6.6 billion shares, 11 percent above the three-month average.
“The consumer sentiment data was a strong number and that has given the market some strength,” Timothy Ghriskey, the chief investment officer at Solaris Group LLC, which manages about $2 billion in Bedford Hills, New York, said in a phone interview. “Yet people are focused on news about the discussions on the fiscal cliff. There does seem to be a movement to force our politicians to come to an agreement so we don’t fall into a recession.”
The Thomson Reuters/University of Michigan’s preliminary index of consumer sentiment for November increased to 84.9 from 82.6 the prior month. Economists projected a reading of 82.9 for the gauge, according to the median forecast of 71 economists surveyed by Bloomberg.
President Barack Obama invited the top Democratic and Republican leaders in Congress to the White House next week to begin talks on a plan to avert the so-called fiscal cliff.
“The American people voted for action,” Obama said at the White House, giving his first public remarks on the budget and deficit since winning re-election Nov. 6. He again said any solution must include spending cuts and raising revenue, including raising taxes on the wealthiest.
If Congress doesn’t act by the end of the year, $607 billion in automatic spending cuts and tax increases are scheduled to take effect starting in January. Obama repeated the broad outline he’s laid out during his re-election campaign for a “balanced” approach to cutting the deficit.
“The market wants Congress to work,” said Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York. “Hopefully we’ll see Congressmen wanting to work with each other versus just fight. Nothing has really changed in Europe. It’s still going to be an issue. We’re seeing a deceleration of earnings growth. That shows the economy continues to grow at a tepid pace.”
Investors also watched Europe’s latest attempts to tame its debt crisis. Euro-area finance ministers may not make a decision on unlocking funds for Greece until late November as they await a report on the country’s compliance with bailout terms, a European Union official said yesterday.
The S&P 500 (SPX) still has risen 9.7 percent this year as central banks around the world stepped up stimulus to boost the economy. About 71 percent of companies that released quarterly results have beaten analysts’ estimates while 60 percent missed sales projections, according to data compiled by Bloomberg.
Seven out of 10 groups in the S&P 500 rose today as technology, phone and health-care companies had the biggest gains. Boeing added 3.2 percent to $73.25. Caterpillar increased 1.5 percent to $84.95. AT&T rose 1 percent to $33.54.
Apple added 1.7 percent to $547.06. The stock yesterday fell to the lowest level since May 18 amid concern the company hasn’t been able to keep up with demand for the latest version of the iPhone, which accounts for about two-thirds of the company’s profit.
Lions Gate Entertainment Corp. (LGF) rose 14 percent to $16.68 after video sales of “The Hunger Games” helped quarterly profit beat analysts’ estimates and bolstered the company’s outlook for the rest of the year.
Zipcar Inc. (ZIP) jumped 16 percent to $7. The company that rents cars by the hour or day reported a third-quarter profit that topped analysts’ estimates and raised the lower end of its annual profit forecast.
J.C. Penney retreated 4.8 percent to $20.64. Excluding items including store restructuring and management-transition costs, the loss was 93 cents a share. The average of eight analysts’ estimates compiled by Bloomberg was for a 7-cent loss.
Groupon Inc. (GRPN) sank 30 percent to $2.76. The largest daily- deal website reported third-quarter revenue that missed estimates as sales of coupons overseas declined from the previous period.
Walt Disney Co. (DIS) dropped 6 percent to $47.06 after reporting fiscal fourth-quarter sales that missed analysts’ estimates amid declines in film revenue and ABC network advertising.
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