U.S. Stocks Rise on Global Manufacturing, Jobless Reports
<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; position: static !important; background-position: initial initial; background-repeat: initial initial;">By Namitha Jagadeesh & Alex Barinka - Aug 22, 2013 9:47 PM GMT+0800</cite>
U.S. stocks rose, sending the Standard & Poor’s 500 Index rebounding from a six-week low, on better-than-estimated global manufacturing data and a report showing the American labor market is improving.
Newmont Mining Corp. and Freeport-McMoRan Copper & Gold Inc. advanced more than 2.4 percent as copper rose. Yahoo Inc. added 1.7 percent after data showed it attracted more U.S. visitors than Google Inc. in July. Hewlett-Packard Co. slid 10 percent after the personal computer maker’s quarterly profit forecast missed some analysts’ estimates. Abercrombie & Fitch Co. plunged 20 percent as second-quarter earnings that fell short of forecasts.
The S&P 500 (SPX) gained 0.5 percent to 1,651.71 at 9:42a.m. in New York. The Dow Jones Industrial Average rose 42.62 points, or 0.3 percent, to 14,940.17. Trading in S&P 500 stocks was 3.9 percent above the 30-day average at this time of day.
“The employment numbers were encouraging and showed a continuation of slow growth in employment,” Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank in Charlotte, North Carolina, said in a telephone interview. His firm manages $170 billion. “There are signs of stabilization in China and improvement in Europe, which could help U.S. multinationals in the long run.”
The S&P 500 fell 0.6 percent yesterday to the lowest level since July 8 as minutes from theFederal Reserve’s July meeting showed officials support stimulus cuts this year if the economy improves. The Dow declined for a sixth day, the longest losing streak in 13 months.
Stimulus, Earnings
Fed stimulus helped push the S&P 500 up as much as 153 percent from its March 2009 low, as better-than-estimated corporate earnings also fueled equity gains. Of the 483 companies in the S&P 500 that have reported quarterly earnings this period, 71 percent surpassed profit estimates, Bloomberg data show.
The fewest workers in more than five years applied for U.S. unemployment benefits over the past month, indicating the labor market continues to improve.
The number of claims in the month ended Aug. 17 declined to 330,500 a week on average, the least since November 2007, a Labor Department report showed today in Washington. Compared with a week earlier, claims rose by 13,000 to 336,000, in line with the median forecast of 48 economists surveyed by Bloomberg.
The Fed has said it plans to keep benchmark interest rates near zero at least as long as theunemployment rate is above 6.5 percent and inflation is no more than 2.5 percent.
The Conference Board is due to publish its index of the economic outlook for the next three to six months at 10 a.m. New York time. The measure rose 0.5 percent in July, having been unchanged in June, according to the median forecast in a Bloomberg survey of 42 economists.
Global Manufacturing
Overseas reports showed Germany led growth in manufacturing and services in the euro area, while a gauge for China’s factory output unexpectedly showed expansion.
Newmont Mining climbed 2.5 percent to $32.64 and Freeport-McMoRan advanced 2.4 percent to $31.09 as copper rose on China’s manufacturing data. A factory index released by HSBC Holdings Plc and Markit Economics showed a preliminary reading of 50.1, exceeding the 48.2 median estimate of economists in a Bloomberg survey. Readings above 50 signal growth.
Barrick Gold Corp., the world’s biggest producer of the precious metal, gained 2.8 percent to $19.61. Gold Fields Ltd. said it will pay $300 million for Barrick’s Granny Smith, Lawlers and Darlot gold mines in Western Australia.
Yahoo, the biggest U.S. Web portal, climbed 1.7 percent to $27.53. More than 196 million users spent time on Yahoo’s websites in July, ComScore Inc. said. That’s 4.3 million more than Google Inc. and the first time Yahoo’s Web traffic surpassed that of the world’s most popular search engine since May 2011.
J.C. Penney
J.C. Penney Co. dropped 1.3 percent to $13.16. The department-store chain working to recover from its worst sales year in more than two decades adopted a one-year shareholder rights plan to protect against takeovers. The plan wasn’t instituted in response to any effort to take control of the company, J.C. Penney said.
The retailer last week ended a struggle with activist investor Bill Ackman, its largest shareholder, over how quickly to replace Chief Executive Officer Mike Ullman and rejected his plan to remove Chairman Tom Engibous.
Hewlett-Packard tumbled 10 percent to $22.80 after forecasting earnings excluding some items of 98 cents to $1.02 a share for the fiscal fourth quarter. Analysts had predicted $1.01 on average, according to estimates compiled by Bloomberg.
Abercrombie & Fitch plunged 20 percent to $37.23 as the retailer reported second-quarter earnings of 16 cents a share, compared with the average analyst estimate of 29 cents and its own forecast of at least 28 cents.
Sears Holding Corp. slumped 7.9 percent to $39.87. The retailer controlled by Edward Lampertsaid its second-quarter loss widened to $194 million as its loyalty program members used more discounts.
Members of the company’s Shop Your Way program accounted for more than 65 percent of sales at Sears operations and Kmart in the quarter. Sales fell 6.3 percent to $8.87 billion.
To contact the reporters on this story: Namitha Jagadeesh in London [email protected]; Alex Barinka in New York at [email protected]
To contact the editor responsible for this story: Andrew Rummer at [email protected]
