U.S. Stock Rise as Banks Rally on Italy Debt Move. By Rita Nazareth -

U.S. stocks rose, after the biggest weekly gain since 2009 in the Standard & Poor’s 500 Index, as Italy’s Mario Monti proposed budget cuts and Germany and France pushed for a new European Union treaty to fight the debt crisis.
All 10 groups in the S&P 500 gained, led by financial shares. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) climbed at least 3.2 percent. MetLife Inc. (MET), the largest U.S. life insurer, rallied 3.8 percent after saying earnings will probably increase in 2012. Dollar General Corp. advanced 2.3 percent after the dollar store chain raised its annual earnings forecast and said it will buy back as much as $500 million in shares.


The S&P 500 advanced 1.5 percent to 1,262.90 at 10:10 a.m. New York time. The benchmark gauge for U.S. equities extended last week’s 7.4 percent increase and restored its year-to-date gain, up 0.5 percent in 2011. The Dow Jones Industrial Average climbed 150.91 points, or 1.3 percent, to 12,170.33 today.
“It’s a week of Europe,” James Paulsen, who helps oversee about $333 billion as chief investment strategist at Minneapolis-based Wells Capital Management, said in a telephone interview. “There’s some expectation you could have surprisingly good news coming out of Europe, a bigger-than- expected approach to solving this thing. If the bids for European bonds don’t fade away, that might get people more excited about this.”
Italian borrowing costs dropped as Italy’s Prime Minister Monti will lobby parliament to support a 30 billion-euro ($40 billion) package of austerity and growth measures. German Chancellor Angela Merkel and French President Nicolas Sarkozy pushed for a rewrite of the EU’s governing treaties to tighten economic cooperation as a first step to ending the debt crisis.

Crisis-Fighting Funds

Merkel’s government won’t stand in the way of Bundesbank help to fight the crisis by means of loans channeled through the International Monetary Fund, a senior Merkel ally said.
Financial stocks had the biggest gain in the S&P 500 (SPX) among 10 industries, rising 2.2 percent as a group. Bank of America added 3.2 percent to $5.82. JPMorgan increased 4.5 percent to $33.80. Morgan Stanley (MS) jumped 4.9 percent to $16.28.
Stocks rose even as the Institute for Supply Management’s non-manufacturing index fell to 52 in November from 52.9 a month earlier. The measure was projected to rise to 53.9, according to the median forecast in a Bloomberg News survey. Separate data showed that American factories received fewer orders in October for a second month.
MetLife rallied 3.8 percent to $32.97. Next year’s operating profit, which excludes some investment results, will be $4.80 to $5.20 a share, the New York-based company said today in a statement. That compares with the average $5.08 estimate of 20 analysts surveyed by Bloomberg.
Dollar General (DG)
Dollar General added 2.3 percent to $40.85. The company raised its 2012 adjusted earnings forecast to as much as $2.32 a share. On average, the analysts surveyed by Bloomberg estimated profit of $2.29 a share.
SuccessFactors Inc. (SFSF) surged 51 percent to $39.70. SAP AG, the largest maker of business-management software, agreed to buy the company for $3.4 billion in cash to keep pace with rival Oracle Corp. in the cloud-computing market.
Entergy Corp. (ETR) jumped 3.6 percent to $72.14. ITC Holdings Corp. (ITC) will acquire the company’s power-line business for $1.78 billion in assumed debt, making it one of the largest U.S. owners of transmission lines. ITC gained 7.3 percent to $79.13.
Chesapeake Energy Corp. (CHK) added 1.8 percent to $25.89. The company which agreed last month to sell part of its Utica Shale holdings sold to a group of private investors $750 million worth of preferred shares in a subsidiary created to help fund development of the oil and natural-gas field.

Year-End Rally

The S&P 500 may jump 6.9 percent by the end of this month as the benchmark measure completes a year-end rally, according to Peter Beuttell, a technical analyst at MTS Research Ltd. in Bath, England.
“If you look around the world, certain indexes didn’t look like they recovered enough, so there is a chance that the initial rallies could repeat,” Beuttell said in a telephone interview today. “That supports the case for another rally pattern, which is under way now.”
The “double zigzag” that began in October will continue this month, with the S&P 500 climbing to a resistance level of 1,330 by the end of the year, Beuttell said. The gauge slipped less than 0.1 percent to 1,244.28 on Dec. 2. The S&P 500 will not drop to its support level of 1,120 to 1,160 until next year. The S&P 500 has rebounded 15 percent from its October low of 1,099.23.