U.S. Stocks Rise After Two-Day Drop on Confidence DataLu Wang and Callie Bost
U.S. stocks advanced for the first time in three days as commodity and health-care shares rallied and economic data showed consumer confidence at a six-year high.
International Business Machines Corp., Cisco Systems Inc. and Johnson & Johnson rallied more than 2.2 percent, leading gains in the Dow Jones Industrial Average. Health-care companies rose 0.8 percent as biotechnology stocks halted a four-day slump. Freeport-McMoRan Copper & Gold Inc. rose 1.5 percent as copper prices increased. Carnival Corp. slid 5 percent after it narrowed its full-year profit forecast.
The Standard & Poor’s 500 Index added 0.4 percent to 1,865.62 at 4 p.m. in New York. The Dow average increased 91.19 points, or 0.6 percent, to 16,367.88. The Russell 2000 Index was little changed.
“Things don’t look spectacular here, but they look OK,” Curtis Holden, a senior investment officer at Tanglewood Wealth Management in Houston, said by phone. The firm oversees about $800 million. “The U.S. economy seemed to have cooled off from the pace it’s on toward the end of last year. There may be a little relief recently that things may be stable here.”
Large companies led the market’s gain as investors opted for less volatile stocks. IBM, the world’s largest computer-services provider, advanced 3.6 percent to $195.04. Cisco, the world’s biggest maker of network routers and switches, gained 3.6 percent to $22.34. J&J, a health-care products company, rose 2.3 percent to $97.38.
The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility also known as VIX, fell 7.1 percent to 14.02 today. About 6.6 billion shares changed hands on U.S. exchanges, in line with the three-month average.
Three rounds of bond purchases from the Federal Reserve have helped fuel economic growth, sending the S&P 500 surging as much as 178 percent from its 2009 low. Fed Chair Janet Yellen said on March 19 that the central bank’s stimulus program could end this fall and benchmark interest rates may rise about six months later.
Fed Bank of Philadelphia President Charles Plosser said in an interview on CNBC today that the central bank wants to get back to normal policy, and that he doesn’t think the Fed changed its position on a rate rise.
The Conference Board’s index of U.S. consumer confidence rose to 82.3 in March from 78.3 a month earlier, the New York-based private research group said today. The median forecast in a Bloomberg survey of 76 economists called for a reading of 78.5 this month.
Another report showed purchases of new homes in the U.S. fell in February to the lowest level in five months, a sign the industry may take time to pick up after inclement weather damped demand earlier in the year.
Residential real-estate prices climbed at a slower pace in the year through January than a month earlier. The S&P/Case-Shiller index of property values in 20 cities increased 13.2 percent from January 2013, the smallest gain since August, after rising 13.4 percent in the 12 months through December.
“There is no doubt that the market is discounting the first quarter,” Tom Wirth, a senior investment officer for Chemung Canal Trust Co. in Elmira, New York, said in a telephone interview. The firm oversees $1.8 billion. “They know the weather is going to materially impact first-quarter GDP. It’s just wait and see until we see if there is truly accelerating strength in the economy.”
Investors have added $8.4 billion to U.S. equity exchange-traded funds in the past five days and $1 billion to bond ETFs, data compiled by Bloomberg show. Financial stocks absorbed the most money among industry ETFs, taking in $1 billion during the past week.
Industrials rose 0.9 percent for the best performance in the S&P 500, as nine out of 10 groups advanced. Shares of energy and health care stocks climbed 0.8 percent. The Nasdaq Biotechnology Index added 0.1 percent, ending a four-day, 8.7 percent drop.
Raw-material producers in the S&P 500 rose 0.5 percent as a group. Copper rose the most in 15 weeks in New York on speculation that demand will improve as China, the world’s largest metals consumer, takes steps to bolster economic growth. Freeport-McMoRan, the largest publicly traded copper producer, climbed 1.5 percent to $32.08.
Walgreen Co. climbed 3.3 percent to $66.42. The owner of pharmacies said it plans to close 76 drugstores in the second half of fiscal 2014. Synergies from its Alliance Boots business will be higher than previously estimated, the company said.
Sonic Corp. rallied 11 percent to $23.23, the highest level since April 2008. The company’s second-quarter adjusted profit of 7 cents a share beat the average analyst projection of 6 cents.
McCormick & Co. advanced 5.5 percent to $71.20, the highest level since August. The maker of spices and other flavored products reported first-quarter profit and sales that exceeded analysts’ estimates.
Carnival declined 5 percent to $38.02. The world’s largest cruise line operator has been facing lower ticket prices and higher costs to attract customers hesitant about past incidents, including onboard illnesses and a fire on a Triumph cruise.