U.S. Stocks Advance as Home Depot, AK Steel Help Offset Europe
Traders work on the floor of the New York Stock Exchange in New York. Photographer: Ramin Talaie/Bloomberg
U.S. stocks advanced, trimming yesterday’s loss, as rallies by Home Depot Inc. and AK Steel Holding Corp. helped offset a Standard & Poor’s downgrade of Portugal and Greece’s credit ratings.
Home Depot rose 2.8 percent, leading gains by consumer companies, after the largest U.S. home-improvement retailer sold $2 billion in bonds to raise cash and finance buybacks. AK Steel climbed 4.9 percent after SAC Capital Advisors LP reported a 4.8 percent stake. Apollo Group Inc. (APOL) dropped 7.3 percent after reporting less student enrollment. The S&P 500 Index (SPX) rebounded after falling below its average level from the prior 50 days.
The S&P 500 increased 0.3 percent to 1,313.54 at 11:12 a.m. in New York. It rose after falling to 1,305.26, compared with yesterday’s 50-day average of 1,306.11. The Dow Jones Industrial Average gained 42.99 points, or 0.4 percent, to 12,240.87, led higher by Home Depot.
“The bounce off the 50-day moving average today shows that the market trend is still up,” said Christopher Verrone, head of technical analysis at New York-based Strategas Research Partners. “The market is exhibiting a healthy bull trend, where pullbacks to key levels should be bought, not sold.”
The S&P 500 fell as much as 0.4 percent earlier after S&P reduced Portugal and Greece’s debt ratings, bolstering speculation Europe’s debt crisis will hamper the global economy. Portugal’s sovereign credit ratings were cut to the lowest investment grade of BBB- and Greece was shifted to BB- at S&P, which said more reductions are possible.
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