Dow Caps Longest Winning Streak Since 2011 on Jobs, Retail Sales

U.S. stocks rose for a seventh week, sending the Dow Jones Industrial Average to the longest stretch of gains in almost three years, as improved data on employment and retail sales offset concern over a cut in monetary stimulus.

Yahoo! Inc. and Union Pacific Corp. climbed at least 1.6 percent after announcing stock buybacks. Airlines advanced as United Continental Holdings Inc. rallied 4.9 percent. Time Warner Cable Inc. jumped 10 percent on speculation the company will be bought. Best Buy Co. and Campbell Soup Co. paced declines among consumer stocks, sinking at least 7.2 percent amid disappointing forecasts.

The Standard & Poor’s 500 Index added 0.4 percent to a record 1,804.76 over the five days, extending its longest weekly advance since February. The Dow climbed 103.07 points, or 0.7 percent, to 16,064.77.

“The big change to me looking at this week is just the change in sentiment,” Daniel Genter, who oversees about $4.3 billion as president and chief executive officer of Los Angeles-based RNC Genter Capital Management, said in a telephone interview. “More and more people are discounting that the potential tapering is not going to totally derail this market. There is life after tapering.”

Stocks Rebound

Equities slipped during the first three days of the week as minutes from a Federal Reserve meeting indicated the central bank may reduce monetary stimulus in coming months. Stocks rebounded over the next two sessions, with the Dow closing above 16,000 for the first time, as data showed weekly jobless claims fell to the lowest level since September. Retail sales increased 0.4 percent in October, the most in three months, according to a Commerce Department report.

Four out of five investors expect the Fed to delay a decision to begin reducing its bond buying until March 2014 or later, according to the Bloomberg Global Poll of investors, traders and analysts who are subscribers. Just 5 percent are looking for a move at its Dec. 17-18 meeting, the Nov. 19 poll showed.

Three rounds of Fed bond purchases have helped push the S&P 500 up 167 percent from a bear-market low in 2009. The benchmark gauge for American equities is up 26.5 percent this year, poised for the best annual gain since 1998, and is trading for about 17 times its companies’ reported earnings.

While the valuation reached the highest level since May 2010, it’s still below the multiples at the market’s two previous peaks, when the ratio reached 17.5 in October 2007 and 31 in March 2000, data compiled by Bloomberg show.

‘Fairly Valued’

“The market is fairly valued,” RNC’s Genter said. “With slow growth and minimal P/E expansion, earnings will be the focus and earnings are good and will carry us for another year.”

Profits for S&P 500 companies will grow 9.9 percent in 2014, up from a 4.8 percent increase this year, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index rose 0.6 percent for the week to 12.26. The gauge of S&P 500 options known as the VIX trimmed its 2013 decline to 32 percent.

Four out of the 10 main S&P 500 industries gained as financial and health-care shares climbed more than 1.6 percent for the best performance.

Yahoo advanced 2.9 percent to $36.49. The largest U.S. Web portal boosted its stock buyback plan by $5 billion, returning more cash to shareholders as Chief Executive Officer Marissa Mayer seeks to revive growth.

Union Pacific, the largest U.S. railroad, rose 1.6 percent to $162.02 after announcing a buyback of as much as $9.5 billion in stock.

Airlines Rally

The Bloomberg U.S. Airlines Index rallied 2.4 percent to the highest level since February 2007 as billionaire David Tepper said the industry is his “big play in the market.”

United Continental Holdings climbed 4.9 percent to $38.54. The world’s biggest airline said it would cut $2 billion in annual spending and boost profit.

Time Warner Cable jumped 10 percent to $132.92. Comcast Corp. and Charter Communications Inc. have discussed a joint bid for the second-largest U.S. cable company that would divide its assets between them, people with knowledge of the matter said. The talks between Comcast and Charter have been preliminary, said the people, who asked not to be identified because the matter is private.

JPMorgan Chase & Co. rallied 4.7 percent to $57.46. The bank agreed to pay a record $13 billion to resolve U.S. probes into the bank’s sale of mortgage bonds that officials said helped feed the financial chaos of 2008.

Biogen Idec

Biogen Idec Inc. surged 17 percent to $285.62. The company’s multiple sclerosis drug Tecfidera won designation as a “new active substance” in Europe, giving the company an additional 10 years of protection from generic copies and paving the way for approval there.

Tyson Foods Inc. jumped 11 percent to $31.82. The largest U.S. meat processor posted higher-than-estimated quarterly revenue after a gain in prices and sales volumes for beef and chicken.

Best Buy declined 9.9 percent to $39.37. The world’s largest consumer-electronics retailer said it will keep pace with competitors’ discounts in the holiday season, hurting fourth-quarter profitability.

Campbell Soup lost 7.2 percent to $39.37. The company said profit this year will be less than it previously estimated as soup and beverage sales slow.

GameStop Corp. slumped 12 percent to $49.86. The largest specialty retailer of video games forecast fourth-quarter profit of no more than $2.14 a share. That trailed the average analyst estimate of $2.16 in a Bloomberg survey.

Home Improvement

Lowe’s Cos. declined 7.5 percent to $47.90. The second-largest U.S. home-improvement retailer posted third-quarter profit that trailed analysts’ estimates as it worked to match Home Depot Inc.’s growth in an improving housing market.

Intel Corp., the world’s largest maker of semiconductors, dropped 2.7 percent to $23.87 after saying revenue next year will be little changed from 2013 levels, short of analysts’ estimates.

Tesla Motors Inc. tumbled 10 percent to $121.38. The company’s Model S, the electric sedan marketed by the company as “the safest car in America,” is being investigated by U.S. auto regulators in a possible precursor to a recall.

Before it's here, it's on the Bloomberg Terminal.