U.S. stocks rose for the week, sending benchmark indexes to their biggest gains in a month, as data from jobless claims to manufacturing showed the economy is strengthening.
JPMorgan Chase & Co. added 5.9 percent, helping financial companies post their best week since May, after Federal Reserve Chair Janet Yellen said interest rates could rise in the middle of next year. Microsoft Corp. advanced 6.5 percent after Morgan Stanley said the company’s anticipated Office software for Apple Inc.’s iPad may deliver $1.2 billion a year in billings. Hewlett-Packard Co. rallied 9.9 percent as Barclays Plc boosted its recommendation on the stock.
The Standard & Poor’s 500 Index rose 1.4 percent to 1,866.52 over the five days. The Dow Jones Industrial Average climbed 237.10 points, or 1.5 percent, to 16,302.77. Both gauges capped their best week since Feb. 14.
“The economic data, quite frankly, has been better,” Walter Todd, who oversees about $990 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said by phone March 21. “The market has shrugged off Yellen’s commentary.”
The S&P 500 slid on March 19 after Yellen said the central bank’s stimulus program could end this fall and benchmark interest rates may rise about six months later. The Fed had previously said it would not raise rates for a considerable period, without specifying a time frame.
Economic reports over the week showed U.S. factory production rose in February by the most in six months and an index of leading indicators increased more than forecast. The number of Americans filing applications for unemployment benefits held near the lowest level in almost four months, a sign the labor market continues to strengthen.
“It’s going to be a much more volatile year, but stocks will work their way higher,” Dan Veru, chief investment officer who helps oversee $5 billion at Palisade Capital Management LLC, said by phone.
The bull market in U.S. equities this month entered its sixth year, with the S&P 500 surging as much as 178 percent from its 2009 low, as three rounds of bond purchases from the Fed helped fuel economic growth in the past 11 quarters.
Earnings from S&P 500 companies are forecast to grow 7.3 percent this year and accelerate to 11 percent in 2015, analysts’ estimates compiled by Bloomberg show.
The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility, fell the most since February, sinking 16 percent to 15 for the week. The index, also known as VIX, is still up 9.3 percent this year.
All but one of the 10 main industries in the S&P 500 advanced, with utilities losing 0.2 percent. Phone stocks rose the most, jumping 3.6 percent, as AT&T Inc. rallied 5.6 percent to $34.30.
A measure of financial shares in the S&P 500 climbed 3.1 percent to the highest level since September 2008 as Treasury yields surged following Yellen’s comments, spurring speculation that banks may benefit from a wider spread between the rate they pay to borrow and what they charge to lend.
JPMorgan jumped 5.9 percent to $60.17 while Citigroup Inc. increased 6.8 percent to $50.08.
Microsoft increased 6.5 percent to $40.16. Chief Executive Officer Satya Nadella is expected to debut a version of Office for the iPad at an event next week. That may signal greater investment in non-Windows platforms around mobile and cloud, and boost investor sentiment on the stock, Keith Weiss, an analyst with Morgan Stanley, wrote in a note.
Hewlett-Packard jumped 9.9 percent to $31.95. The personal-computer maker was raised to overweight, an equivalent of buy, from equal-weight by Benjamin Reitzes, an analyst with Barclays.
First Solar Inc. surged 36 percent to $73.37. The largest U.S. solar manufacturer said profit will increase to $4.50 to $6 a share in 2015. Earnings this year will be in the range of $2.20 to $2.60 a share, the company said.
An S&P index of homebuilders declined 1.6 percent to the lowest level since January amid concern rising borrowing costs will hurt the housing recovery. Toll Brothers Inc. lost 1.4 percent to $35.72 while D.R. Horton Inc. slid 2.8 percent to $21.42.
Symantec Corp. dropped 9.7 percent to $18.20. The biggest maker of security software for personal computers fired President and Chief Executive Officer Steve Bennett after less than two years on the job, as the company struggles with a shift to mobile devices.
Nasdaq OMX Group Inc. retreated 4.6 percent to $37.54 as New York’s Attorney General Eric Schneiderman opened a broad investigation into whether U.S. stock exchanges and alternative venues provide high-frequency traders with unfair advantages.