S&P 500 Climbs to Record as Apple Rallies; Oil Advances

The Standard & Poor’s 500 Index climbed to a record as Apple Inc. rallied and companies from PepsiCo Inc. to Dow Chemical Co. beat profit estimates. Emerging-market shares rose to an 18-month high, while the ruble and oil gained.

The S&P 500 added 0.2 percent to 1,987.01 at 4 p.m. in New York, topping its previous record reached July 3. The Dow Jones Industrial Average fell 0.2 percent as Boeing tumbled 2.3 percent. The Stoxx Europe 600 Index increased 0.1 percent and the MSCI Emerging Markets Index rose 0.2 percent. The rupiah strengthened 0.7 percent against the dollar and Russia’s ruble gained 0.1 percent. The yield on 10-year Treasuries was little changed at 2.47 percent. West Texas Intermediate oil advanced 0.7 percent.

Apple rallied as it signaled the long wait for new products is nearing an end, while Boeing sank after taking a charge related to a military tanker. Facebook Inc. gained in after-market trading as results topped forecasts. About 78 percent of S&P 500 members that have posted results this season beat analysts’ estimates. The European Union weighed limiting Russia’s access to capital markets as a train carrying bodies from flight MH17 arrived in Kharkiv, Ukraine.

“The general tone of earnings has been positive not just on the bottom line but also top-line, and we’ve seen inflation numbers that gave comfort to those who believe the market will be supported by the Fed,” Russ Koesterich, chief investment strategist at New York-based BlackRock Inc., said via phone. “As you get through earnings season you may seem some drift until you get to more economic data.”

Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

Apple, Microsoft

Apple rose 2.6 percent to the highest level since September 2012, as the company stoked anticipation for new devices on a conference call. Apple reported a drop in iPad demand and projected third-quarter revenue below analysts’ predictions.

PepsiCo climbed 1.9 percent as it raised its annual forecast after reducing costs. Dow Chemical increased 3 percent. Juniper Networks Inc. declined 9.6 percent as its estimates trailed expectations.

Microsoft Corp. rose 0.1 percent as earnings and revenue topped forecasts. The software maker said its purchase of Nokia Oyj’s mobile business dragged down fiscal profit, while it benefited from improving corporate demand for computers and software delivered over the Web.

Health-care companies had the biggest gain among 10 main industries in the S&P 500. Biogen Idec Inc. rallied 11 percent after raising its full-year forecast, and Intuitive Surgical Inc. jumped 18 percent as results topped estimates.

Facebook Soars

Puma Biotechnology Inc. surged 295 percent after the company said a clinical trial of its experimental drug blocked the return of breast cancer in women with a type of early-stage disease.

Facebook climbed 4.6 percent as of 4:34 p.m. in New York. After the market closed, the social network reported revenue surged 61 percent in the second quarter, with the share from mobile advertising matching analysts’ projections.

Inflation Rate

The S&P 500 increased 0.5 percent yesterday after inflation data signaled the Federal Reserve won’t be compelled to raise interest rates in the near future. Chair Janet Yellen has said rates will stay low for a “considerable time” after the central bank stops its monthly bond purchases. It is on track to end them in October.

The Fed may have scope to keep interest rates at zero for longer than investors anticipate as inflation stays muted and a 2014 slowdown prolongs the labor-market recovery, the International Monetary Fund said.

The IMF cut its U.S. growth forecast for this year to 1.7 percent from 2 percent predicted in June, citing a first-quarter contraction, after a 1.9 percent advance last year. The fund left its 2015 forecast at 3 percent, the fastest expansion since 2005.

The S&P 500 has advanced 7.6 percent this year amid better-than-estimated corporate earnings and central bank stimulus, as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.

European Shares

The Stoxx 600 pared gains of as much as 0.4 percent after Daimler AG fell 0.8 percent, erasing an early rally of 2.6 percent. The European gauge climbed 1.3 percent yesterday.

Telenor ASA advanced 2.5 percent after the largest phone company in the Nordic region said it expects this year’s profit margin to improve from 2013. Akzo Nobel NV, Europe’s biggest paintmaker, rallied 3.9 percent.

“Usually we have a lot lighter of volume in this time of year and negative geopolitical news would drive the market down more than it has, but the economy is better fundamentally than most people think it is,” Kurt Cambier, senior partner at Littleton, Colorado-based Centennial Capital Partners, said in a phone interview.

The Micex Index of Moscow shares was little changed after earlier rising as much as 1.1 percent. The ruble strengthened for a second day to 34.90 per dollar.

The EU yesterday threatened to restrict Russia’s access to capital markets and sensitive energy and defense technologies unless President Vladimir Putin expedites a probe into the downing of the Malaysia Airlines plane over eastern Ukraine last week that killed all 298 on board.

Fighter Jets

The arrival in the Ukrainian city of Kharkiv of a train carrying victims’ remains ended days of demands that pro-Russia rebels in the former Soviet republic release the bodies. Ukraine’s Defense Ministry said rebels in the eastern part of the country downed two government fighter jets.

The Tadawul All Share Index gained 1.4 percent, extending yesterday’s 2.8 percent advance. The gauge has climbed to a six-year high since Saudi Arabia’s regulator said it will open up the stock market to international investors in the first half of 2015.

El Al Israel Airlines jumped as much as 7.2 percent to 0.584 shekel, the biggest increase since March 31 after global airlines suspended flights to Tel Aviv because of rocket fire. The Israeli operator is still flying into the airport.

The Hang Seng China Enterprises rose 2 percent today after a 2.4 percent surge yesterday. The Shanghai Composite Index increased 0.1 percent, while the Hang Seng Index added 0.8 percent in Hong Kong.

China Mortgages

Chinese banks will probably offer discounted mortgage rates to their clients in the second half of 2014 as demand in the country’s housing market weakens, according to 74 percent of analysts and economists in a Bloomberg News survey conducted from July 14 to July 17.

The Jakarta Composite Index advanced 0.2 percent. The rupiah strengthened to 11,483 per dollar, the strongest level since May 20, before trading at 11,510.

Joko Widodo, who is the governor of Jakarta won Indonesia’s presidential vote by more than six percentage points. His opponent, Prabowo Subianto, has said he will contest the election in the constitutional court. Prabowo, who was a general under the country’s former military dictator Suharto, has three days to file a case in court, the verdict of which is binding.

The euro was little changed at $1.3462 after declining to $1.3455, the weakest since Nov. 21. The 18-nation shared currency dropped as much as 0.2 percent to 136.41 yen, the lowest since Feb. 4. The Japanese currency was at 101.52 per dollar.

Australia Inflation

Australia’s dollar strengthened to the highest level in almost two weeks after a government report showed annual inflation accelerated to the fastest pace in four years.

U.K. government bonds rose and the pound erased an intraday advance as investors pared bets on higher interest rates after the Bank of England released minutes of this month’s policy meeting.

The 10-year yield fell three basis points to 2.55 percent as the minutes showed officials discussed whether wage growth, currently at the least since records began in 2001, should carry more emphasis in their deliberations. Sterling slipped 0.2 percent to $1.7036 after rising as much as 0.2 percent.

West Texas Intermediate advanced 0.7 percent after a government report showed stockpiles dropped at Cushing, Oklahoma, the contract’s delivery point. Brent climbed 0.7 percent to $108.03 a barrel as fighting intensified in eastern Ukraine.

Natural gas futures slid 0.3 percent in New York, dropping for the fifth straight day on speculation that mild U.S. weather will bolster inventory gains.

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