U.S. Stocks Fluctuate Near 18-Month High as Jobless Claims Rise
By Joanna Ossinger
April 15 (Bloomberg) -- U.S. stocks fluctuated, with benchmark indexes hovering near 18-month highs, as a jump in jobless claims and concern the market has risen too far, too fast tempered growing optimism about earnings and the economy.
Hewlett-Packard Co., Coca-Cola Co. and Wal-Mart Stores Inc. led declines in the Dow Jones Industrial Average. United Parcel Service Inc. climbed 5.9 percent after the world’s largest package-delivery company raised its earnings forecast. Mariner Energy Inc. surged 39 percent after Apache Corp. agreed to buy the company.
The Standard & Poor’s 500 Index gained less than 0.1 percent to 1,211 at 10:31 a.m. in New York after the benchmark gauge for U.S. equities jumped 1.1 percent yesterday, its biggest gain in six weeks. The Dow Jones Industrial Average fell 5.06 points, or 0.1 percent, to 11,118.05 today.
“Seeing companies guide higher on earnings, like UPS, is very positive but on the job claims those are numbers we don’t want to see,” said Mike Shea, a managing partner and trader at Direct Access Partners LLC in New York. “We don’t want this to be a jobless recovery and we want people to be working again because this is still a consumer-based economy.”
The S&P 500 threatened to snap a five-day rally after the Labor Department said 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.
RSI Climbs
The S&P 500’s relative strength index, a gauge of stock- market 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 been above 70 for five straight days and reached 78.34 today.
Manufacturing in the New York region expanded in April at a faster pace than anticipated. The Empire State Index rose to 31.9, a ninth consecutive month of growth, from 22.9 in March. Economists surveyed by Bloomberg had expected a reading of 24. Industrial production
Stocks surged yesterday on better-than-estimated results at Intel Corp., JPMorgan Chase & Co. and CSX Corp. and a report that showed retail sales climbed in March by the most in four months.
The S&P 500 has rallied 79 percent from last year’s low in March to the highest level since September 2008. 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.
‘Plenty of Fuel’
“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.”
United Parcel Service rallied 5.9 percent to $69.32 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.”
Mariner Energy soared 40 percent, the most since the company was spun off from Forest Oil Corp. in 2006, to $25.30. Apache, the largest independent U.S. oil producer by market value, agreed to buy the company for about $26.22 per share in cash and stock. Apache shares lost 2.5 percent to $105.39.
Yum! Brands Inc. climbed 3.7 percent to $43.24 after the owner of Taco Bell and other restaurant chains reported an 11 percent rise in first-quarter profit, helped by sales growth in China.
American Superconductor Corp. climbed 6 percent to $30.80 after Deutsche Bank AG raised its recommendation for the maker of wind turbine components and transmission lines to “buy” from “hold.”
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