S&P 500 Post Longest Winning Streak Since 2004 on Profits
U.S. stocks rose, giving the Standard & Poor’s 500 Index its longest winning streak since 2004, as Starbucks Corp. and Procter & Gamble Co. reported increased profit and German business confidence beat forecasts.
Starbucks, the world’s largest coffee-shop operator, advanced 4.1 percent. Procter & Gamble, the biggest consumer- products maker, climbed 4 percent as it also raised its 2013 earnings forecast. Halliburton (HAL) Co. jumped 5.1 percent as profit exceeded estimates. Apple Inc. surrendered the title of the world’s most-valuable company to Exxon Mobil Corp. as the iPhone maker slumped 2.4 percent.
The S&P 500 added 0.5 percent to 1,502.96 in New York. The benchmark gauge closed above 1,500 for the first time since December 2007 and gained for eight straight days, the longest string of advances since November 2004. The Dow Jones Industrial Average gained 70.65 points, or 0.5 percent, to 13,895.98 today. About 6.3 billion shares traded hands on U.S. exchanges today, in line with the three-month average.
“Day to day, it is earnings-driven at this point,” Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said by telephone. “There’s a point in time where the market has gone up for so long, so much, that it’s got to take some period of time to consolidate those gains before it goes again.”
The S&P 500 climbed for the fourth straight week, advancing 1.1 percent since Jan. 18. The measure failed to close above 1,500 yesterday after surpassing that level intraday.
The benchmark index has more than doubled from a 12-year low in 2009 as corporate earnings have increased for three years and the Federal Reserve expanded its bond purchases to keep interest rates low to spur growth. The S&P 500 is about 4 percent below its all-time high of 1,565.15 set in October 2007.
Stocks rose today as German business confidence increased more than forecast in January, adding to signs that Europe’s largest economy is recovering. The European Central Bank said banks will next week repay more of its emergency three-year loans than economists forecast, in another sign the euro region’s debt crisis is abating. Equities briefly pared gains as data showed purchases of new U.S. homes unexpectedly dropped in December.
Earnings exceeded projections at about 76 percent of the 147 companies in the S&P 500 that have released results so far in this reporting season, while 67 percent topped sales estimates, according to data compiled by Bloomberg. Analysts are turning more optimistic, boosting their projections for fourth- quarter profit growth to 4 percent from 2.9 percent at the beginning of the month, the data show.
“Earnings have been better than expected,” Phil Orlando, the New York-based chief equity strategist at Federated Investors Inc., said in a telephone interview. His firm oversees about $370 billion. “Guidance has been muted, which would be expected, and it’s still early but on balance we’ve got to conclude that this first batch of results have been better than the Street’s conservative forecasts.”
All 10 groups in the S&P 500 advanced. Consumer discretionary and energy companies rose the most, climbing at least 0.9 percent.
Starbucks (SBUX) added 4.1 percent to $56.81. Net income increased to $432.2 million in the fiscal first quarter from $382.1 million a year earlier, the Seattle-based company said late yesterday. Comparable sales in the Americas rose 7 percent in the period, beating estimates for a 5.9 percent gain.
P&G advanced 4 percent to $73.25 after reporting second- quarter profit that topped analysts’ estimates and raising its annual earnings forecast. Net income more than doubled to $4.06 billion in the period ended Dec. 31, the Cincinnati-based company said.
Halliburton jumped 5.1 percent to $39.72. The world’s largest provider of hydraulic-fracturing services reported fourth-quarter profit and sales that exceeded analysts’ estimates amid stronger growth in international regions such as the Middle East, Asia and Latin America that offset lower activity in North America.
Microsoft Corp. (MSFT) climbed 0.9 percent to $27.88. The world’s largest software maker reported lower profit on higher revenue as the company spent more to market its Windows operating system and lure consumers flocking to tablets and smartphones. Microsoft earned 76 cents a share in the second quarter. Analysts had predicted profit of 74 cents.
Tempur-Pedic International Inc. (TPX) rallied 6.4 percent to $40.79. The maker of mattresses reported fourth-quarter adjusted profit of 60 cents a share, exceeding the 55 cent average estimate in a Bloomberg survey of analysts.
Netflix Inc. jumped 15 percent to $169.56, adding to yesterday’s 42 percent surge. The world’s largest online-video service has advanced since posting an unexpected fourth-quarter profit and a larger-than-anticipated gain in customers. Billionaire Carl Icahn, with a 10 percent stake, said yesterday he sees further gains for the shares.
Oshkosh Corp. (OSH) jumped 19 percent to $41.08. The supplier of armored trucks to the U.S. military boosted its full-year earnings forecast to at least $2.80 a share as first-quarter profit was almost double the average analyst estimate.
Apple slumped 2.4 percent to a one-year low of $439.88. The iPad maker’s reign as the No. 1 stock ended after concern over slowing growth drove the shares to the biggest loss in the S&P 500 this year. The decline reduced its market capitalization to $413.1 billion, below Exxon Mobil Corp.’s $418.2 billion. Exxon climbed 0.4 percent to $91.73 today and is up 6 percent this year.
Caterpillar Inc. (CAT) slid 1.1 percent to $95.58 for the second- biggest drop in the Dow. The world’s biggest maker of construction and mining equipment reported the first decline in retail machine sales in more than 2 1/2 years after a slowdown in Asian demand.
Hasbro Inc. fell 3 percent to $37.31. The maker of Nerf, Playskool and Transformers toys said preliminary fourth-quarter sales trailed its forecast because of weaker demand in the U.S.
Yum! Brands Inc. slipped 2.7 percent to $64.63. The Shanghai Food Safety Commission Office found excessive animal drugs in some chicken samples from Yum, China’s official Xinhua News Agency reported, citing the watchdog. The U.S. restaurant chain operates KFC and Pizza Hut outlets in China.
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