U.S. Stocks Advance to Five-Month High
U.S. stocks rose, sending the Standard & Poor’s 500 Index to its highest level since July, amid bets that China may act to spur economic growth.
All 10 groups in the S&P 500 advanced as financial, commodity and industrial shares had the biggest gains. Bank of America Corp. (BAC) and Caterpillar Inc. (CAT) rallied at least 2.9 percent. Alcoa Inc. (AA), the first company in the Dow Jones Industrial Average (INDU) to report quarterly results, pared a rally of as much as 4.5 percent. Tiffany (TIF) & Co. tumbled 10 percent after the luxury jewelry retailer reduced its annual earnings forecast.
The S&P 500 climbed 0.9 percent to 1,292.08 at 4 p.m. New York time. The index rose to the highest level since July 29, a week before the U.S. was stripped of its AAA credit rating by S&P. The Dow gained 69.78 points, or 0.6 percent, to 12,462.47. The Russell 2000 Index (RTY) of small companies jumped 1.5 percent, rallying above its average price of the last 200 days.
“Earnings don’t have to knock the ball out of the park to push equities higher,” Jack Ablin, who helps oversee $55 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview. “Expectations are low.” On the international front, “there’s a growing sense that China will ease policy and, to the extent that Europe can muddle, it’s probably net positive news.”
Stocks rose as a drop in China’s import growth bolstered forecasts for monetary easing. Equities pared gains as Alcoa, the largest U.S. aluminum producer, tumbled from today’s peak. The S&P 500 has ended the earnings season higher 75 percent of the time when Alcoa rises in the session after reporting its results, according to a Bespoke Investment Group study of 34 quarters going back to 2003.
For more visit: Bloomberg.com
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