April 23 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as earnings from Travelers Cos. to Netflix Inc. beat estimates and new-home sales rose in March.
Equities recovered after a false report of explosions at the White House briefly erased gains. Netflix jumped 24 percent for the biggest advance in the S&P 500. Travelers rose 2.1 percent as profit exceeded projections. Bank of America Corp. gained 3 percent after Morgan Stanley recommended investors buy the stock. Apple Inc. surged 5.2 percent after the market closed, as the company raised its dividend and increased its share buyback.
The S&P 500 rose 1 percent to 1,578.78 in New York. The Dow Jones Industrial Average added 152.29 points, or 1.1 percent, to 14,719.46. More than 6.4 billion shares traded hands on U.S. exchanges today, about 1.1 percent higher than the three-month average.
“So far so good on the earnings season, which has been fair, but we still need to see a lot of company reports,” Mark Kravietz, a Melville, New York-based partner and managing director at HighTower Advisors LLC, said in a phone interview. He manages about $300 million. “We’re still in a bull market but in a pause to refresh after the first quarter rally.”
The benchmark equity gauge was up about 1 percent at about 1,578 at 1:07 p.m. New York time today when a posting on the Associated Press Twitter account said there had been explosions at the White House and President Barack Obama had been injured. The S&P 500 erased almost the entire gain, falling as low as 1,563.03 by 1:10 p.m.
The index recovered from the plunge within three minutes as the news service said its Twitter account had been hacked and there were no explosions. Exxon Mobil Corp., Apple, Johnson & Johnson and Microsoft Corp. briefly lost about 1 percent in two minutes before rebounding.
“We saw a huge dip in the futures, immediately starting as headlines went out that the AP Twitter feed was reporting on the White House incident,” Dave Lutz, head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore, said by e-mail. “That spread quickly but we advised clients there was no confirmation from the White House or any of the other news outlets.”
The Chicago Board Options Exchange Volatility Index, or VIX, surged as high as 14.87 at 1:10 p.m. before erasing 8.5 percent to 13.61 within five minutes. The VIX, which moves in the opposite direction to the S&P 500 about 80 percent of the time, slumped 6.3 percent today to 13.48 and is down 25 percent for the year.
The equity gauge added 0.5 percent yesterday, rebounding from the biggest weekly drop in five months. It has surged 133 percent from a 12-year low in 2009 as corporate earnings beat estimates and the Federal Reserve embarked on three rounds of bond purchases to stimulate the economy.
Of the 143 S&P 500 companies that have reported their quarterly results so far, 72 percent have exceeded analysts’ predictions for earnings, data compiled by Bloomberg show. Profit at S&P 500 companies dropped 1.1 percent in the first three months of the year, according to forecasts compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.
An S&P index of homebuilders jumped 5.6 percent, as all 11 members increased at least 2 percent. Toll Brothers Inc. surged 9.3 percent to $34.13 for the biggest gain since October 2011. PulteGroup Inc. increased 6 percent to $19.40.
Sales of new U.S. homes advanced in March as near record-low mortgage rates helped the industry complete the strongest quarter since 2008, putting the economy on firmer footing.
All 10 industry groups in the S&P 500 rose, led by a 1.8 percent gain among financial shares.
Bank of America rose 3 percent to 12.07 for the second-biggest gain in the Dow after Morgan Stanley upgraded the second-largest U.S. lender to overweight. The Charlotte, North Carolina bank may trim $16.1 billion in costs over the next three years, exceeding the added $5 billion that the lender may spend on lawsuits, Betsy Graseck wrote today in a research note.
Travelers rose 2.1 percent to $86.35. The second-largest U.S. commercial insurer increased its dividend by 8.7 percent to 50 cents per share, matching a forecast compiled by Bloomberg
The firm reported first-quarter profit that beat analysts’ estimates on wider margins. Travelers is charging some customers more for coverage and changing policy terms to boost underwriting margins as low bond yields and severe weather pressure earnings.
MetLife Inc. soared 5.5 percent to $37.74. The largest U.S. life insurer increased its dividend for the first time since 2007 after its exit from banking limited oversight from the U.S. Federal Reserve. The firm will pay a quarterly dividend of 27.5 cents per share, up from the previous payout of 18.5 cents.
“Dividend-paying stocks is the area I’m most bullish on,” said Matt McCormick, who helps oversee $9.1 billion as a money manager at Cincinnati-based Bahl & Gaynor Inc. “If you are nervous about the stock market, then at least get paid something while you hold stock.”
Apple advanced 5.2 percent to $427.44 at 4:54 p.m. The iPhone maker said it will raise its quarterly dividend by 15 percent to $3.05 a share and boost its share-repurchase program to $60 billion from $10 billion. The stock rose 1.9 percent to $406.13 in the regular market session.
The company reported its first profit decline since 2003 and forecast revenue that missed analysts’ estimates amid slowing iPhone sales growth and accelerating competition from Samsung Electronics Co.
DuPont Co. rose 4.1 percent to $52.49, the highest since May. The largest U.S. chemical company by market value posted first-quarter earnings that exceeded analysts’ forecasts on record profit from crop seeds and pesticides.
Lockheed Martin Corp. added 1.3 percent to $97.06. The world’s largest defense contractor said first-quarter earnings beat analysts’ estimates while cautioning that 2013 sales may fall at the low end of its prior forecast because of automatic U.S. budget cuts.
The Bloomberg U.S. Airlines Index jumped 4.5 percent as both Delta Air Lines Inc. and US Airways Group Inc. posted better-than-forecast profits in the first quarter, traditionally the industry’s weakest period. Both carriers had paying passengers in more than 81 percent of their available seats, and they wrung out more revenue from each seat flown a mile, a benchmark gauge.
Delta surged 10 percent to $16.72 for its biggest gain since April 2011. Delta hadn’t reported a profit in the first three months of the year since 2000, Chief Financial Officer Paul Jacobson said in a memo to employees. US Airways rose 5 percent to $16.30.
Netflix jumped 24 percent to $216.99, the highest since September 2011. The company said yesterday it gained 2 million new U.S. customers last quarter, reaching 29.2 million. Analysts had estimated Netflix would end the quarter with 29 million online U.S. users, according to the average of seven estimates compiled by Bloomberg.
Coach Inc., the largest U.S. luxury handbag maker, climbed the most since October, adding 9.8 percent to $55.55 as quarterly profit and sales both exceeded analyst estimates. The New York-based company also said its board voted to raise the annual dividend by 15 cents to $1.35 per share.
United Technologies Corp. slid retreated 0.8 percent to $92.89. The company’s chief financial officer said automatic spending cuts by the federal government have started to hurt orders. First-quarter earnings topped analysts’ estimates as sales of aerospace equipment surged.
Staples Inc. fell 4.5 percent to $12.40 after Cleveland Research said government spending cuts may weaken sales at office-supplies companies. Office Depot Inc. slid 1.5 percent to $3.84.
Newmont Mining Corp. dropped 2.9 percent to $32.43, as Goldman Sachs Group Inc. cut its “near-term” outlook for commodities amid prospects for weak demand from China to Europe. Cliffs Natural Resources Inc., the largest U.S. iron-ore miner, slipped 1.9 percent to $17.32, its lowest in more than four years.
To contact the reporter on this story: Nikolaj Gammeltoft in New York at firstname.lastname@example.org