U.S. Stocks Advance After China Rebounds; Greek Deadline Looms

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U.S. stocks advanced with global markets as Chinese equities rebounded the most since 2009, easing concern over economic growth. Shares pared an early rally as Greece approached a deadline for securing a bailout.

Citigroup Inc. and Bank of America Corp. increased more than 1.4 percent as banks recovered from Wednesday’s drop. Walgreens Boots Alliance Inc. gained 4.2 percent after quarterly profits topped analysts’ projections. Apple Inc. slid 2 percent to lead technology shares lower, while semiconductors retreated for a fourth day.

The Standard & Poor’s 500 Index climbed 0.2 percent to 2,051.31 at 4 p.m. in New York, after falling 1.7 percent to a four-month low yesterday. The Dow Jones Industrial Average gained 33.20 points, or 0.2 percent, to 17,548.62. The Nasdaq Composite Index rose 0.3 percent. About 6.7 billion shares traded hands on U.S. exchanges Thursday, 4 percent above the three-month average.

“Every time we get to the end of the day we start losing steam because people start worrying about what’s going to happen overnight,” said Randy Warren, who manages more than $100 million at Exton, Pennsylvania-based Warren Financial Service & Associates Inc. “Is Greece going to make headlines? Is China going to make headlines? There’s a lot of worry about what might happen.”

The S&P 500 climbed as much as 1.4 percent today before giving up more than three-quarters of its gains. The early rally briefly carried the index above its average price during the past 200 days, before closing below that level for the second straight day.

Global Growth

The Greek government drafted a new proposal it hopes will convince creditors to let the country stay in the euro. The package of economic reforms and spending cuts is due to be submitted by midnight Brussels time. The proposals are set to be discussed by European Union leaders Sunday to determine whether the country will get a new bailout, or be forced to leave the single currency.

In China, stocks halted a rout to post the biggest gain since 2009 amid volatile trading. Regulators banned major stockholders from selling stakes, with more than half the country’s listed companies suspended from trading.

Greece’s financial crisis and China’s equity market turmoil have diverted attention from U.S. economic data and the path of the Federal Reserve’s monetary policy, as investors grow concerned about global growth. The S&P 500 is down 3.7 percent since its May record, and 0.4 percent for the year.

The International Monetary Fund today cut its forecast for global growth this year, citing a weaker first quarter in the U.S. and expressed confidence financial-market turbulence from China to Greece won’t cause widespread damage.

Fed Watch

Minutes of the Federal Reserve’s June meeting, released Wednesday, signaled that officials saw improving economic conditions warranting tighter monetary policy, but expressed concerns on the overseas risks.

Investors will get further clues on the Fed’s outlook when Chair Janet Yellen speaks on Friday. Fed officials in June forecast they would raise rates twice this year, signaling that September is the most likely month for liftoff, while lowering their outlook for subsequent increases.

Data today showed more Americans than forecast filed for unemployment benefits last week, representing a pause in the pace of labor-market improvement. Applications for benefits have been below 300,000 for 18 straight weeks, the longest stretch since 2000.

Earnings Season

Quarterly earnings will become a more prominent focus for investors in the coming weeks, after Alcoa Inc. unofficially kicked off the reporting season yesterday. JPMorgan Chase & Co. and Wells Fargo & Co. are among S&P 500 firms reporting results next week. Analysts project earnings for companies on the gauge dropped 6.5 percent in the second-quarter.

The Chicago Board Options Exchange Volatility Index rose 1.6 percent today to 19.97, its highest since January, after earlier losing 13 percent. The gauge, known as the VIX, rose 22 percent Wednesday.

Seven of the S&P 500’s 10 main groups advanced, led by financial, health-care and consumer goods shares. Citigroup, Comerica Inc. and JPMorgan Chase climbed at least 1 percent as Treasury yields had their biggest increase in two months. The KBW Bank Index gained 1.1 percent. Nasdaq OMX Group Inc. rose 2.8 percent, the biggest jump this year.

Walgreens, Transports

Walgreens Boots Alliance rose 4.2 percent, the most in three months. The largest U.S. drugstore chain’s results topped analysts’ expectations and it raised its profit forecast as it begins to implement a cost-cutting strategy that will eventually close 200 stores. Competitor CVS Health Corp. added 1.5 percent.

Freeport-McMoran rose 1.7 percent, its first gain after a seven-session stretch in which the miner lost 17 percent. Alcoa climbed 0.9 percent, trimming an earlier gain of as much as 4.5 percent, after its second-quarter sales beat estimates while profit missed.

Transportation companies helped boost the industrials group, with JB Hunt Transportation Services Inc. gaining 2.2 percent after Longbow Research upgraded the shares to buy from neutral. American Airlines Group Inc. and JetBlue Airways Corp. rose more than 0.9 percent. The Dow Jones Transportation Average added 0.6 percent after sliding 2.2 percent yesterday.

Millennial Media Inc. surged 28 percent, the most in more than three years, after TechCrunch reported that AOL Inc. is in talks with the mobile-advertising company about a possible acquisition.

Chipmakers Slump

Chesapeake Energy Corp. and Pioneer Natural Resources Co. added more than 2.8 percent to lead gains in the energy sector. Oil rallied 2.2 percent after five sessions of declines that sent it down 13 percent.

Altera Corp. dropped 3.4 percent and Intel Corp. lost 1.9 percent after the Capital Forum said its analysis suggests “substantial” antitrust risk for the chip companies’ merger. Avago Technologies Ltd. fell 2.6 percent after losing 3.6 percent yesterday, while Texas Instruments Inc. declined 2.9 percent to an eight-month low.

Coty Inc. sank 4.7 percent, its biggest daily drop on record, after agreeing to buy 43 of Procter & Gamble Co.’s beauty brands for about $12.5 billion in a deal that would more than double its sales and transform it into one of the world’s largest cosmetics companies. P&G slipped 0.4 percent.

Utility companies in the S&P 500 retreated 1.1 percent, the most in two weeks, amid the rise in bond yields. Higher yields make the group’s dividend payout less attractive to investors. Southern Co. and Scana Corp. lost more than 2 percent, with Southern dropping the most in five months.