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U.S. Stocks Advance as Boehner Vows to Work With Obama

Dec. 20 (Bloomberg) -- In today's "Single Best Chart," Bloomberg's Scarlet Fu displays how we may be in for a painless deleveraging process as bond yields are lagging U.S. debt-to-GDP. She speaks on Bloomberg Television's "Bloomberg Surveillance."

U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from its biggest drop in five weeks, as House Speaker John Boehner said he expects to keep working on a budget plan with President Barack Obama.

NYSE Euronext rose a record 34 percent as IntercontinentalExchange Inc. (ICE) agreed to buy the company for $8.2 billion. Accenture Plc (ACN) slid 2 percent after revenue from technology consulting fell 3.6 percent from a year earlier. Merck & Co. slipped 3.4 percent after saying it won’t seek U.S. marketing approval for a cholesterol drug. Financial stocks rose the most in the S&P 500, leading gains in all 10 groups.

The S&P 500 climbed 0.6 percent to close at 1,443.69 today. The equity benchmark yesterday slipped from its highest level since Oct. 18 as a White House spokesman said Obama would veto a proposal presented by Boehner. The Dow Jones Industrial Average increased 59.75 points, or 0.5 percent, to 13,311.72.

“The market continues to be driven by the state of the fiscal-cliff negotiations,” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. He spoke in a telephone interview. “That’s what people are keeping an eye on and that’s what is causing the swings in the market.”

Growth, Budget

Stocks also advanced after third-quarter economic growth was revised higher. The 3.1 percent growth in gross domestic product exceeded the highest projection in a Bloomberg survey and compared with a previously estimated 2.7 percent gain, according to Commerce Department figures. The median estimate of economists called for a 2.8 percent advance.

Republicans in Congress will vote today on Boehner’s plan to raise taxes on incomes over $1 million. The proposal is aimed at preventing more than $600 billion of automatic tax increases and spending cuts from coming into effect next year.

Boehner accused Obama of being unwilling to stand up to fellow Democrats in the fight over how to avert spending cuts and tax increases scheduled to begin in January.

“I did my part; they’ve done nothing,” Boehner, an Ohio Republican, told reporters in Washington. “I’m convinced that the president is unwilling to stand up to his own party.”

Still, the speaker said “I remain hopeful” a deal can be reached.

The number of Americans filing first-time claims for unemployment insurance payments rose for the first time in five weeks, a sign further improvement in the labor market depends on faster economic growth, Labor Department figures showed today.

Annual Gain

The S&P 500 has gained 15 percent this year, its largest annual rally since 2009. The benchmark measure has risen 1.9 percent this month.

Other reports today signaled expansion in the world’s largest economy. Sales of previously owned homes rose more than forecast in November to reach a three-year high as lower borrowing costs sustained the U.S. housing rebound, the National Association of Realtors reported today in Washington.

The Federal Reserve Bank of Philadelphia’s general economic index increased to 8.1 in December from minus 10.7 a month earlier. A reading of zero is the dividing line between expansion and contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

NYSE Euronext surged 34 percent to $32.25 after IntercontinentalExchange, the 12-year-old energy and commodity futures exchange, agreed to acquire the company for cash and stock worth $8.2 billion, moving to take control of the world’s biggest equities market. ICE added 1.4 percent to $130.10, while an S&P index of financial stocks gained 1.4 percent.

Deal Premium

ICE, based in Atlanta, will pay $33.12 a share for the owner of the New York Stock Exchange, 38 percent above yesterday’s closing price, according to a statement today. Last year, the U.S. Justice Department blocked a joint hostile bid by ICE and Nasdaq OMX Group Inc. for the New York-based company on concern the combination would dominate U.S. stock listings.

Accenture, the world’s second-largest technology consultancy, slid 2 percent to $69.02. Sales from advising clients, its biggest source of revenue, declined to $3.96 billion, the company said late yesterday. Customers have opted for contracts over longer periods that don’t generate revenue as quickly, a trend that will continue into the second quarter, Chief Financial Officer Pamela Craig said.

Merck lost 3.4 percent to $42.16 for the biggest retreat in the Dow. The company won’t seek U.S. marketing approval for its good cholesterol drug Tredaptive after a key study showed it ineffective and potentially harmful.

Gaming Stocks

Video-game makers and retailers fell amid growing pressure from Washington and advocacy groups concerned about possible links between violent games and tragedies like the school massacre in Newtown, Connecticut. A bill introduced yesterday by U.S. Senator Jay Rockefeller directs the National Academy of Sciences to examine whether violent games and programs lead children to act aggressively, the West Virginia Democrat said in a statement.

Electronic Arts Inc. (EA), publisher of “Medal of Honor,” fell 3.2 percent to $13.94. Take-Two Interactive Software Inc. (TTWO), the maker of “Grand Theft Auto,” fell 2.4 percent to $11.69. GameStop Corp. (GME), the video-game chain, slid 5.2 percent to $26.13.

Carnival Corp. (CCL) slumped 5.3 percent to $36.99. The world’s biggest cruise-line operator provided a full-year earnings forecast that fell short of analysts’ forecasts. The company said earnings will rise to as much as $2.40 a share next year, excluding some items. Analysts predicted $2.46 a share, the average of estimates compiled by Bloomberg.

Illumina Jumps

Illumina Inc. (ILMN) jumped 7.8 percent to $56.22 after Swiss newspaper L’Agefi said Roche Holding AG may buy the U.S. genetic-sequencing company for $66 a share, a higher price than its first bid in April. The newspaper said it failed to verify the source of the information.

Bed Bath & Beyond Inc. (BBBY) lost 6.5 percent to $56.36. The operator of more than 1,400 home-furnishing stores projected full-year profit that trailed analysts’ estimates. Profit will be $4.48 to $4.54 a share this year, the retailer said yesterday. Analysts projected $4.62 a share, the average of 25 estimates compiled by Bloomberg.

Rite Aid Corp. (RAD) soared 16 percent to $1.21. The third-largest U.S. drugstore chain gained the most in more than three years after forecasting better full-year results and returning to a profit in the third quarter.

Amicus Therapeutics Inc. (FOLD) slumped 47 percent to $3.06 after saying a drug it was developing with GlaxoSmithKline Plc failed to perform better than a placebo.

CarMax Inc. (KMX) jumped 9 percent to $37.97. The largest U.S. seller of used cars rose to a record as increased vehicle sales drove quarterly profit that beat analysts’ estimates.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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