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U.S. Stocks Rise as Gains by Commodity Producers Outweigh Europe

U.S. Stocks Advance
Traders work at the New York Stock Exchange in New York. Photographer: Jin Lee/Bloomberg

U.S. stocks rose, paring a weekly loss in the Standard & Poor’s 500 Index, as gains among commodity producers helped overcome debt-crisis concerns after Fitch Ratings said it may cut ratings of European nations.

Halliburton Co. and Chevron Corp. increased at least 1.2 percent, pacing gains among energy companies. Banking shares in the S&P 500 rose 1.2 percent as a group, trimming an earlier rally. Research In Motion Ltd. fell 11 percent after the company delayed the release of a new generation of BlackBerry devices. Zynga Inc., the largest maker of games for Facebook, declined 5 percent in its first day of trading.

The S&P 500 rose 0.3 percent to 1,219.66 at 4 p.m. New York time, after jumping as much as 1.3 percent earlier. The benchmark index has fallen 3 percent since Dec. 31 after being up for the year on nine days since Oct. 27. The Dow Jones Industrial Average slipped 2.42 points, or less than 0.1 percent, to 11,866.39 today.

“We’re seeing a market in which there’s very little long-term investor interest,” David Kelly, who helps oversee $394 billion as chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “Europe is still dodging all the major decisions it needs to make in order to fix the problem and I think that the disappointment in that is still dogging the markets right now.”

The S&P 500 lost 2.8 percent this week. It slumped Dec. 13 after the Federal Reserve refrained from taking new actions to bolster growth, saying the U.S. economy is maintaining its expansion even as the global economy slows. Stocks rose yesterday after data showed improvements in jobless claims and manufacturing. The U.S. economy will expand at a 3.5 percent annual rate this quarter, up from a prior estimate of 3 percent, according to estimates today by JPMorgan Chase & Co. economists.

Rating Outlook

Stocks trimmed an early rally after Fitch Ratings lowered France’s rating outlook to negative and put the grades of Belgium, Spain, Slovenia, Italy, Ireland and Cyprus on review for a downgrade, citing Europe’s failure to find a “comprehensive solution” to the debt crisis. It also said all investment-grade countries in the euro region rated below AAA are subject to a “Rating Watch Negative” review, which Fitch expects to complete by the end of January.

Moody’s Investors Service said Dec. 12 it would review the ratings of all European Union countries after a summit of leaders last week did little to ease pressure on the governments in Europe. S&P placed the ratings of 15 nations, including France and Germany, on review for possible downgrade on Dec. 5.

Funding Deadline

Gains in stocks were propelled earlier by optimism the European Union will meet a Dec. 19 deadline for funding a crisis-fighting package. Luxembourg’s Jean-Claude Juncker, who leads a group of finance ministers from the region, said the EU should meet the goal for arranging loans to the International Monetary Fund. An hour after Juncker’s comments, the Bundesbank said it won’t rush to a decision on the loans, which are to be provided by EU national central banks.

“Going into a weekend, people take money off the table for fear of not knowing what’s going to happen, chiefly in Europe,” Peter Tuz, who helps manage about $800 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a telephone interview.

Energy and raw material companies advanced at least 0.7 percent among groups in the S&P 500. Chevron added 1.2 percent to $100.86. Halliburton jumped 1.6 percent to $31.76.

Banks climbed the most among 24 S&P groups. Wells Fargo & Co. jumped 1.4 percent to $25.98. JPMorgan Chase rose 0.4 percent to $31.89, after rallying as much as 2.6 percent earlier. Bank of America Corp. lost 1.1 percent to $5.20.

Options Expiration

Today is the expiration of futures and options contracts on indexes and individual stocks, an event known as quadruple witching, which occurs once every three months.

A measure of expected stock-market volatility declined 3.3 percent today, trading at the farthest below its 200-day average since July. The Chicago Board Options Exchange Volatility Index, or VIX, dropped to 24.29, or 5.5 percent below its 200-day average.

The S&P 500 is trading for 12.8 times reported earnings, 22 percent lower than the six-decade average of 16.4, according to data compiled by Bloomberg. American companies have topped Wall Street profit estimates for 11 straight quarters.

Adobe Rises

Adobe Systems Inc., the largest maker of graphic-design software, rose the most in the S&P 500 after saying first-quarter sales forecast beat some estimates, boosted by demand for tools that design Web pages and create online video. The stock advanced 6.6 percent to $28.20.

RIM dropped 11 percent to $13.44 after saying a new generation of BlackBerrys designed to fuel a comeback won’t be out until the “latter part” of 2012. The smartphone maker, which originally planned to release the new devices in the firs quarter of next year, also gave sales and profit forecasts that missed analysts’ estimates.

Zynga slipped 5 percent to $9.50 in its first day of trading, after raising $1 billion in an initial public offering that gave it a greater valuation than rival Electronic Arts Inc. The developer of games such as “CityVille,” “FarmVille” and “Mafia Wars” sold 100 million shares for $10 each, the top end of a proposed range.

Cablevision Systems Corp. tumbled 8.5 percent to $12.75. Th U.S. cable-television provider’s chief operating officer, Tom Rutledge, will step down this month for undisclosed reasons, in what Craig Moffett, an analyst at Sanford C. Bernstein & Co., calls a “staggering loss” for the company.

Accenture Plc fell 3.5 percent to $54.15. The world’s second-largest technology-consulting company lowered its full-year earnings forecast on currency fluctuations, after beating analysts’ estimates for the first quarter.

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