U.S. Stocks Advance on Optimism About Earnings, Economy Growth
By Joanna Ossinger
April 15 (Bloomberg) -- U.S. stocks advanced for a sixth day as growing optimism that earnings and the economy are growing overshadowed an unexpected increase in jobless claims.
Intel Corp., Caterpillar Inc. and General Electric Co. helped lead gains in the Dow Jones Industrial Average after Federal Reserve reports showed factory production increased 0.9 percent in February and regional data indicated the gains extended into this month. United Parcel Service Inc. rallied 5.3 percent after raising its earnings forecast. Mariner Energy Inc. surged 42 percent after Apache Corp. agreed to buy the company.
The Standard & Poor’s 500 Index increased 0.1 percent to 1,211.67 at 4 p.m. in New York. Its six-day rally matches its longest winning streaks of the year. The Dow Jones Industrial Average rose 21.46 points, or 0.2 percent, to 11,144.57 today.
“There’s plenty of fuel out there that could propel stocks higher,” said Hank Smith, who helps oversee $6 billion as chief investment officer of Haverford Trust Co. in Radnor, Pennsylvania. “Corporate earnings continue to accelerate. That’s adding confidence about the economic recovery.”
Equities fluctuated in early trading amid concern the market has risen too far, too fast. The S&P 500’s relative strength index, a gauge of momentum, has been above 65 for 29 straight days, the longest stretch since 1986, according to Bloomberg data. A reading above 70 is a signal to sell for many technical analysts. The S&P 500’s RSI has topped 70 for five straight days and reached almost 79 today.
79 Percent Rally
The S&P 500 has rallied 79 percent from a 12-year low in March 2009 to the highest level in 18 months. Combined profit for S&P 500 companies will increase 30 percent in the first quarter from a year earlier, according to analyst estimates compiled by Bloomberg.
Benchmark indexes opened lower after the Labor Department announced that initial jobless claims rose to 484,000 last week, an increase of 24,000 from the previous week and above the 440,000 estimated by economists in a Bloomberg survey.
Industrial shares advanced the most of 10 groups in the S&P 500, led by UPS and First Solar Inc. Health care and financial shares were the worst performers with losses of at least 0.3 percent.
UPS jumped 5.3 percent to $68.89, its highest intraday price since September 2008, after the company boosted its full- year forecast and reported first-quarter earnings excluding some items of 71 cents a share. Analysts expected 57 cents, according to a Bloomberg survey. Piper Jaffray upgraded UPS shares to “overweight” from “neutral.” FedEx Corp. added 2.6 percent to $96.42.
First Solar
First Solar rose 4 percent to $137.90, its highest price in three months. U.S. solar power developers including First Solar and SunPower Corp. added 481 megawatts of the renewable energy last year, according to the Solar Energy Industry Association.
Intel continued its rally after boosting its gross margin forecast for 2010 and reporting earnings that exceeded analyst estimates on April 13. The world’s largest chipmaker gained 3 percent to $24.22, its highest price since August 2008, after rising 3.3 percent yesterday.
No comments:
Post a Comment