S&P 500 Nears Record as Intel Jumps, Energy Shares Rise With Oil

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U.S. stocks advanced, sending the Standard & Poor’s 500 Index to within 0.5 percent of its record, as Intel Corp. climbed and energy companies rallied with oil reaching a 2015 high.

Intel rose 4.3 percent after its forecast for the second quarter exceeded some analysts’ projections. Energy companies hit an almost five-month high as oil gained for a fifth day. Delta Air Lines Inc. climbed 2.6 percent after reporting better-than-expected first-quarter earnings. Netflix Inc. soared 12 percent in late trading amid a jump in subscribers.

The S&P 500 increased 0.5 percent to 2,106.63 at 4 p.m. in New York. The Dow Jones Industrial Average gained 75.91 points, or 0.4 percent, to 18,112.61. The Russell 2000 Index added 0.8 percent to an all-time high, while the Nasdaq Composite Index climbed 0.7 percent to close above 5,000 for the first time in three weeks. About 7.1 billion shares changed hands on U.S. exchanges, 6 percent above the three-month average.

“Fed action is probably put off further and earnings are coming in better than expected,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania. “We went into the earnings season by lowering expectations, so we’re set up for a little bit of a rebound here coming into the actual announcements.”

While equity indexes from Asia to Europe have climbed to multiyear highs in recent days, the S&P 500 and Dow last set records on March 2, the same day the Nasdaq Composite topped 5,000 for the first time in 15 years.

Price Fluctuations

The S&P 500 has zigzagged since, falling as much as 3.6 percent through March 11 amid concerns that a stronger dollar and lower oil prices would hurt corporate earnings as the Fed considers raising rates. Signals by central-bank officials that they are in no rush to boost borrowing costs propelled the gauge to within 0.4 percent of its record by March 20, before it retreated again.

The index has been stuck in a range of 52 points since then, as weaker-than-forecast data from hiring to manufacturing elevated concern about earnings while at the same time bolstered the case for keeping rates lower for longer.

The Nasdaq Composite has jumped 5.8 percent this year, coming within 7 points of its all-time high on March 20 as biotechnology and Internet stocks have rallied. The Nasdaq Internet Index has increased for nine straight days, the longest streak since November 2012.

Netflix Gains

Netflix, which has been one of the biggest contributors to the Nasdaq Composite’s gains this year with a 39 percent climb, soared 12 percent as of 4:55 p.m. in New York.

After the market close, the company said U.S. subscribers jumped by 2.28 million, while international customers rose 2.6 million. Both figures beat the company’s Jan. 20 forecast.

Energy shares in the S&P 500 rallied 2.3 percent during regular trading Wednesday, pushing their gain in April to 6.8 percent. The gauge is on track for its best month since January 2013. Its rally has propelled the S&P 500 back above its average price for the past 50 days and to within 11 points of its record.

Semiconductor companies in the benchmark jumped 2.7 percent, the best performers of 24 industries in the index after Intel’s earnings and outlook.

Upside Surprise

“In many ways companies have surprised a bit to the upside,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania. The firm oversees $8 billion. “The market is slowly getting comfortable with foreign exchange headwinds and taking a look at how the intrinsic business is doing.”

Profit at S&P 500 companies probably fell 5.6 percent in the first quarter, analysts estimate, and they project quarterly declines through September.

Investors are weighing economic data to gauge when the Federal Reserve will raise interest rates. A report showed factory output barely climbed in March, buoyed by a rebound in auto making as other industries retreated, indicating a strong dollar and cheap oil are hurting American manufacturing.

Manufacturing Data

The 0.1 percent gain in manufacturing was the first advance in four months, matching the median forecast in a Bloomberg survey of 24 economists. Total industrial production declined more than projected as utility use dropped by the most in nine years. Another report Wednesday showed manufacturing in the New York region unexpectedly contracted this month as orders slumped.

Fed Chair Janet Yellen has said that while rates will probably rise this year, any decision depends on economic data, with recent releases missing projections by the most in six years. The economy expanded across most U.S. regions from mid-February to the end of March, with higher retail sales and rising demand for business services, according to the Fed’s Beige Book report.

The European Central Bank Wednesday kept interest rates unchanged at record lows as it focuses on a bond-buying program to bolster the euro-area economy. ECB President Mario Draghi said at a press conference in Frankfurt that bond purchases will continue until “a sustained adjustment” in inflation is seen.

VIX Falls

The Chicago Board Options Exchange Volatility Index fell 6.1 percent to 12.84. The gauge, known as the VIX, declined 14 percent last week to its lowest level of 2015.

Nine of the S&P 500’s 10 main groups advanced, led by energy, raw materials and technology. Dow Chemical Co. and Freeport-McMoRan Inc. rallied more than 2.6 percent to help lead materials to the highest level in a month.

Energy companies in the benchmark gauge climbed for a second day to their highest since November while oil jumped 5 percent. Transocean Ltd. and Noble Corp. gained more than 7.2 percent, while Southwestern Energy Co. and Halliburton Co. increased more than 4.4 percent.

The rally in offshore drillers over the past four weeks is tied to investors unwinding short positions, James West, an analyst at Evercore ISI, wrote in a note to clients.

HCA Holdings Inc. rose 2.5 percent to a record. The biggest for-profit U.S. hospital chain by patient volume raised its 2015 forecast as hospital visits and insurance reinbursements helped lift preliminary first-quarter results above analysts’ estimates.

JPMorgan, Delta

JPMorgan Chase & Co. advanced 1.9 percent to pace gains in financial shares, up for a second day after Monday’s earnings report, to a 15-year high. Comerica Inc. and Morgan Stanley added at least 1.5 percent.

Delta Air Lines gained 2.6 percent, paring an earlier climb of more than 5 percent, after better-than-expected earnings. The carrier said it plans to cut seating capacity later this year on international routes as the strong dollar and declining oil prices damps overseas travel demand.

Precision Castparts Corp. dropped the most in the S&P 500, losing 3.7 percent. The manufacturer of metal components forecast lower-than-expected quarterly profit and said it will take as much as $363 million in writedowns because of declining demand for pipes used in the energy industry.

UnitedHealth Group Inc. fell 2.2 percent, the most since March and the biggest drop in the Dow. Competitors Anthem Inc., Aetna Inc. and Cigna Corp. lost at least 1.6 percent.

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