S&P 500 Rebounds Toward Record on Housing, Orders Data

The Standard & Poor’s 500 Index rebounded to within two points of its record after orders for U.S. durable goods climbed more than forecast in February and home prices increased the most since June 2006.

Monsanto Co. jumped 4.4 percent as the company and DuPont Co. agreed to dismiss their respective antitrust and soybean patent lawsuits. Netflix climbed 5.4 percent after Pacific Crest Securities LLC raised its price target on the company. Boeing Co. added 2.1 percent after an appeals court upheld the dismissal of a lawsuit. Apparel retailers retreated, as Gap Inc. and Macy’s Inc. lost more than 0.9 percent.

The S&P 500 added 0.8 percent to 1,563.77 at 4 p.m. in New York, after the equity benchmark fell 0.3 percent yesterday. The Dow Jones Industrial Average rose 111.90 points, or 0.8 percent, to 14,559.65, reaching another record. About 5.2 billion shares changed hands on U.S. exchanges today, 18 percent below the three-month average.

“The data continues to be pretty good out of the U.S., even though we had some bad news out of Europe over the past few days,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $170 billion, said by phone. “Housing is a huge part of the economic recovery story and if housing prices rise, people feel better about their homes and generally more confident.”

Record Highs

The S&P 500 yesterday came within one point of its record of 1,565.15 reached in October 2007, before retreating as the bailout of Cyprus spurred concern bank deposits in other euro-area nations may be subject to levies to pay for rescues in the future. The benchmark gauge has surpassed the 1,560 level six times since March 14, only to fall short of the record each time. The Dow first surpassing its 2007 all-time high on March 5.

The bull market in equities entered its fifth year this month as the S&P 500 more than doubled from its bottom in 2009, driven by an unprecedented three rounds of bond purchases by the Federal Reserve.

Equities rose today as residential real estate prices increased in January by the most since June 2006, according to the S&P/Case-Shiller index released today. Orders for U.S. durable goods climbed more than forecast in February, propelled by automobiles and a rebound in commercial aircraft, a Commerce Department report showed.

Consumer Confidence

Consumer confidence slumped more than forecast this month as Washington’s budget battle soured Americans’ views of the economic outlook. The consumer confidence index dropped to 59.7 from a revised three-month high of 68 in February, data from the New York-based Conference Board showed today. New-home sales declined 4.6 percent, worse than the 3.9 percent median estimate, another report showed.

“We like to see what consumers do rather than what they say,” Brad Sorensen, director of market and sector analysis at Charles Schwab Corp., said in a phone interview. The San Francisco-based firm has $2.04 trillion in client assets. “They may say they’re less confident, but does that translate into their spending? So far we haven’t seen that. Retail sales have held up pretty well.”

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines, fell 7.1 percent to 12.77. The gauge has tumbled 29 percent for the year.

Health-care companies, energy and utility shares advanced the most, adding at least 1 percent. Intel Corp. rose 2.9 percent to $21.77 and Hewlett-Packard Co. jumped 2.3 percent to $23.64, for the biggest gains in the Dow. American Express Co. climbed 1.6 percent to a record $67.17, while Pfizer Inc. added 1.6 percent to $28.60, the highest level since 2005.

Monsanto, DuPont

Monsanto rallied 4.4 percent to $103.79. The company will dismiss its claim that DuPont infringed patents for Roundup Ready soybeans, setting aside a $1 billion jury award, and DuPont will dismiss its claim that Monsanto uses monopoly power to stifle innovation, the companies said in a joint statement. The world’s largest seed companies also agreed to enter into licensing agreements for making genetically modified crops. DuPont fell 0.3 percent to $48.97.

Netflix surged 5.4 percent, the most in the S&P 500, to $190.61. Pacific Crest raised its price target on the company to $225 from its previous estimate of $160, writing in a note that “Netflix is the future of non-live video.”

Boeing jumped 2.1 percent to $86.62. The Chicago-based company won a U.S. appeals court ruling affirming the dismissal of an investor lawsuit accusing company officials of making misleading public statements about the readiness of its 787 “Dreamliner” aircraft.

Consumer durables and apparel retailers had the smallest gain as a group among 24 S&P 500 industries. The International Council of Shopping Centers cut its top-end forecast for March same-store sales. “An abnormally cold bout of weather in eastern two-thirds of the country brought a chill to consumers and their interest in spring goods—especially apparel,” Michael Niemira, ICSC vice president of research and chief economist, wrote.

Gap lost 2.7 percent to $35.03 and Macy’s slumped 0.9 percent to $41.99. Abercrombie & Fitch Co. slid 1.5 percent to $45.69.

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