By Elizabeth Stanton
Jan. 26 (Bloomberg) -- U.S. stocks rose for a second day as consumer confidence topped forecasts and companies from Apple Inc. to Travelers Cos. beat earnings estimates, overshadowing concern lending restrictions in China will stifle global growth.
Apple gained 2.6 percent after earnings jumped 50 percent on record sales of Macintosh computers and iPhones. Travelers surged 3.6 percent after the insurer posted a record $1.29 billion quarterly profit. EMC Corp. advanced as its full-year sales forecast topped estimates as corporate technology spending rebounded. The Standard & Poor’s 500 Index recovered from a 0.6 percent slide after the Conference Board’s confidence index increased to 55.9 after the labor market improved.
“The market’s focus is shifting back to the fundamentals of companies, and frankly they’re not that bad,” said Warren Koontz, chief investment officer for large-cap value stocks at Loomis Sayles & Co. in Boston, which oversees $140 billion. “We do need to see continuation of top-line growth in the earnings statements.”
The Standard & Poor’s 500 Index added 0.2 percent to 1,098.82 at 11:33 a.m. in New York. The Dow Jones Industrial Average added 43.69 points, or 0.4 percent, to 10,240.55. The MSCI World Index of shares in 23 developed nations slumped 0.1 percent, falling for the fifth consecutive day.
China Lending
European and Asian shares retreated on concern China’s curbs on lending will slow the global economy’s rebound from its first recession since World War II. Bank of China stopped extending corporate loans in the Shanghai area and China Construction Bank’s branch in the city was told to screen applications for personal loans and mortgages more carefully and to stop new lending once a monthly quota is met, according to people familiar with the situation.
China’s economy, which expanded 10.7 percent in the fourth quarter, has led the recovery from the global recession.
The International Monetary Fund raised its forecast for global economic growth this year, to 3.9 percent from a 3.1 percent projection in October. The Washington-based lender predicted growth of 2.7 percent in the U.S. and 10 percent in China. Still, high unemployment and rising public debt will restrain growth and contain inflation, the IMF said.
Federal Reserve policy makers are considering adopting a new benchmark interest rate to replace the federal funds rate, which they’ve used for the last two decades. The central bank needs to have an effective policy rate in place when it starts to raise interest rates from record lows to keep inflation in check, said Marvin Goodfriend, a former Fed economist.
A record nine-quarter earnings slump for S&P 500 companies is projected to have ended in the fourth quarter with a 73 percent increase in profits. More than 130 companies in the index are scheduled to release results this week.
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