U.S. Stocks Rally, Dow Tops 9,000 for First Time Since January
By Matt Townsend
July 23 (Bloomberg) -- U.S. stocks rose, sending the Dow Jones Industrial Average above 9,000 for the first time since January, as EBay Inc., Ford Motor Co. and AT&T Inc. posted better-than-estimated results and home resales increased more than forecast.
EBay rallied 11 percent as its earnings signaled consumers??? appetite for online commerce is starting to recover. Ford jumped 9.4 percent after topping analyst estimates by paring expenses and adding market share. AT&T added 2.6 percent as new customers of Apple Inc.???s iPhone bolstered profit. D.R. Horton Inc. led all 13 stocks in an index of homebuilders higher as sales of existing homes increased for a third straight month.
The Standard & Poor???s 500 Index climbed to the highest level since President Barack Obama was elected on Nov. 4, advancing 2.3 percent to 976.29 at 4:06 p.m. in New York. The Dow gained 188.03 points, or 2.1 percent, to 9,069.29, the highest since the day after Election Day. The Nasdaq Composite Index surged 2.5 percent to 1,973.6 for a 12th straight gain, its longest streak since 1992 and highest level since October.
???With the round number of 9,000 not being there for a significant amount of time, it???s encouraging,??? said Michael Koskuba, a New York-based fund manager at Victory Capital Management Inc., which oversees $44 billion. ???It???s really a result of companies reporting better-than-expected news. That???s encouraging given that we are in a difficult economic environment.???
???Need to Participate???
The S&P 500 has rallied 11 percent since July 10 as earnings topped analysts??? estimates at 75 percent of the 158 companies in the index that reported results, including Caterpillar Inc., Intel Corp. and JPMorgan Chase & Co. Profits have fallen 25 percent on average from a year ago, according to data compiled by Bloomberg, less than the 33 percent drop projected by analysts as of July 17.
Citigroup Inc. raised its 2009 and 2010 profit estimates for the S&P 500 by 9.8 percent and 11 percent respectively, citing better-than-expected earnings.
???There is an increased sense of a need to participate,??? said Michael Shinnick, who manages a $114 million fund for South Bend, Indiana-based Wasatch Advisors Inc. ???Cash on the sidelines is coming off the sideline. You don???t want to be carrying a lot of cash right now.???
The cost of protecting U.S. corporate bonds from default fell as an index of credit-default swaps sank to the lowest in 13 months, according to CMA DataVision. Credit-default swaps typically fall as investor confidence improves. Contracts on AT&T slid to an almost six-week low and Ford???s dropped to the lowest in at least a year.
EBay, Tech Shares Rally
EBay climbed 11 percent to $21.52 after forecasting revenue that surpassed analysts??? estimates. The shares helped drive a gauge of technology shares in the S&P 500 to its highest level since September. The industry group has gained 14 percent since July 10 as Apple Inc. and Intel Corp. posted earnings that beat analysts??? estimates.
Ford increased 9.4 percent to $6.98. The only major automaker to shun a U.S. rescue reported a second-quarter loss, excluding some items, of 21 cents a share. The average estimate of analysts surveyed by Bloomberg was for a loss of 50 cents.
???Ford looks like it???s improving its balance sheet, and its cash position looks pretty good,??? said Hayes Miller, who helps manage $38 billion at Baring Asset Management Inc. in Boston. ???Not only do we not have a potential for bankruptcy, but it looks like it???s improving itself at a quicker pace than Chrysler and GM.???
AT&T, Builders Gain
AT&T added 2.6 percent to $25.48 after reporting second- quarter earnings, excluding some items of 54 cents a share, beating the average analyst estimate by 5.3 percent.
A gauge of homebuilders advanced 5.2 percent after sales of existing U.S. homes rose 3.6 percent in June to an annual rate of 4.89 million, the National Association of Realtors said in Washington. Economists in a survey had forecast an increase of 1.5 percent. D.R. Horton jumped 7.6 percent to $11.17.
3M Co. gained 7.4 percent to $69.43, the biggest advance in the Dow, after the maker of Post-it Notes and Scotch Tape reported second-quarter profit excluding some items of $1.20 a share, beating the average analyst estimate by 28 percent. The company also raised its 2009 earnings forecast.
Fifth Third Bancorp surged 14 percent to $8.01 to lead a measure of financial shares in the S&P 500 to a 3 percent advance. Ohio???s largest lender posted second-quarter earnings of $1.15 a share, compared with a loss of 37 cents a share a year earlier.
???Good Earnings Season???
???It???s been a good earnings season, given the backdrop that was there,??? said Sarah Hunt, a money manager who helps oversee about $6 billion for Purchase New York-based Alpine Mutual Funds. ???When you look at some of the estimates, they are expecting a better second half.???
McDonald???s Corp., the world???s largest restaurant company, sank 4.6 percent to $56.09, the biggest drop since October. Second-quarter revenue declined more than analysts projected on slowing consumer demand and a stronger U.S. dollar.
Qualcomm Inc. declined 2.2 percent to $47.40 after the company forecast fourth-quarter sales that fell short of some analysts??? estimates, raising concern that handset demand is still slowing. Separately, South Korea???s antitrust regulator said it plans to fine the world???s biggest maker of mobile-phone chips a record 260 billion won ($208 million) for anti- competitive practices.
CIT Group Inc. slid 15 percent to 74 cents, the biggest drop in the S&P 500. Advisers to bondholders that rescued CIT with a $3 billion loan said creditors should push the company into bankruptcy after a debt swap next month, according to a person familiar with the matter.
???Lot of Bargains???
The S&P 500 has rallied 44 percent from a 12-year low on March 9 amid growing evidence that the economy is beginning to recover from the worst recession in more than half a century. The index today climbed above 966, the average year-end forecast of Wall Street strategists as of March 9.
Investors will find ???a lot of bargains??? among U.S. stocks in the next year as the economy recovers and consumer spending improves, said Mario Gabelli, the chairman and chief executive officer of Gamco Investors Inc.
???The world is simple,??? he said. ???You just want to find the best ideas, risk adjusted.???
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By Matt Townsend
July 23 (Bloomberg) -- U.S. stocks rose, sending the Dow Jones Industrial Average above 9,000 for the first time since January, as EBay Inc., Ford Motor Co. and AT&T Inc. posted better-than-estimated results and home resales increased more than forecast.
EBay rallied 11 percent as its earnings signaled consumers??? appetite for online commerce is starting to recover. Ford jumped 9.4 percent after topping analyst estimates by paring expenses and adding market share. AT&T added 2.6 percent as new customers of Apple Inc.???s iPhone bolstered profit. D.R. Horton Inc. led all 13 stocks in an index of homebuilders higher as sales of existing homes increased for a third straight month.
The Standard & Poor???s 500 Index climbed to the highest level since President Barack Obama was elected on Nov. 4, advancing 2.3 percent to 976.29 at 4:06 p.m. in New York. The Dow gained 188.03 points, or 2.1 percent, to 9,069.29, the highest since the day after Election Day. The Nasdaq Composite Index surged 2.5 percent to 1,973.6 for a 12th straight gain, its longest streak since 1992 and highest level since October.
???With the round number of 9,000 not being there for a significant amount of time, it???s encouraging,??? said Michael Koskuba, a New York-based fund manager at Victory Capital Management Inc., which oversees $44 billion. ???It???s really a result of companies reporting better-than-expected news. That???s encouraging given that we are in a difficult economic environment.???
???Need to Participate???
The S&P 500 has rallied 11 percent since July 10 as earnings topped analysts??? estimates at 75 percent of the 158 companies in the index that reported results, including Caterpillar Inc., Intel Corp. and JPMorgan Chase & Co. Profits have fallen 25 percent on average from a year ago, according to data compiled by Bloomberg, less than the 33 percent drop projected by analysts as of July 17.
Citigroup Inc. raised its 2009 and 2010 profit estimates for the S&P 500 by 9.8 percent and 11 percent respectively, citing better-than-expected earnings.
???There is an increased sense of a need to participate,??? said Michael Shinnick, who manages a $114 million fund for South Bend, Indiana-based Wasatch Advisors Inc. ???Cash on the sidelines is coming off the sideline. You don???t want to be carrying a lot of cash right now.???
The cost of protecting U.S. corporate bonds from default fell as an index of credit-default swaps sank to the lowest in 13 months, according to CMA DataVision. Credit-default swaps typically fall as investor confidence improves. Contracts on AT&T slid to an almost six-week low and Ford???s dropped to the lowest in at least a year.
EBay, Tech Shares Rally
EBay climbed 11 percent to $21.52 after forecasting revenue that surpassed analysts??? estimates. The shares helped drive a gauge of technology shares in the S&P 500 to its highest level since September. The industry group has gained 14 percent since July 10 as Apple Inc. and Intel Corp. posted earnings that beat analysts??? estimates.
Ford increased 9.4 percent to $6.98. The only major automaker to shun a U.S. rescue reported a second-quarter loss, excluding some items, of 21 cents a share. The average estimate of analysts surveyed by Bloomberg was for a loss of 50 cents.
???Ford looks like it???s improving its balance sheet, and its cash position looks pretty good,??? said Hayes Miller, who helps manage $38 billion at Baring Asset Management Inc. in Boston. ???Not only do we not have a potential for bankruptcy, but it looks like it???s improving itself at a quicker pace than Chrysler and GM.???
AT&T, Builders Gain
AT&T added 2.6 percent to $25.48 after reporting second- quarter earnings, excluding some items of 54 cents a share, beating the average analyst estimate by 5.3 percent.
A gauge of homebuilders advanced 5.2 percent after sales of existing U.S. homes rose 3.6 percent in June to an annual rate of 4.89 million, the National Association of Realtors said in Washington. Economists in a survey had forecast an increase of 1.5 percent. D.R. Horton jumped 7.6 percent to $11.17.
3M Co. gained 7.4 percent to $69.43, the biggest advance in the Dow, after the maker of Post-it Notes and Scotch Tape reported second-quarter profit excluding some items of $1.20 a share, beating the average analyst estimate by 28 percent. The company also raised its 2009 earnings forecast.
Fifth Third Bancorp surged 14 percent to $8.01 to lead a measure of financial shares in the S&P 500 to a 3 percent advance. Ohio???s largest lender posted second-quarter earnings of $1.15 a share, compared with a loss of 37 cents a share a year earlier.
???Good Earnings Season???
???It???s been a good earnings season, given the backdrop that was there,??? said Sarah Hunt, a money manager who helps oversee about $6 billion for Purchase New York-based Alpine Mutual Funds. ???When you look at some of the estimates, they are expecting a better second half.???
McDonald???s Corp., the world???s largest restaurant company, sank 4.6 percent to $56.09, the biggest drop since October. Second-quarter revenue declined more than analysts projected on slowing consumer demand and a stronger U.S. dollar.
Qualcomm Inc. declined 2.2 percent to $47.40 after the company forecast fourth-quarter sales that fell short of some analysts??? estimates, raising concern that handset demand is still slowing. Separately, South Korea???s antitrust regulator said it plans to fine the world???s biggest maker of mobile-phone chips a record 260 billion won ($208 million) for anti- competitive practices.
CIT Group Inc. slid 15 percent to 74 cents, the biggest drop in the S&P 500. Advisers to bondholders that rescued CIT with a $3 billion loan said creditors should push the company into bankruptcy after a debt swap next month, according to a person familiar with the matter.
???Lot of Bargains???
The S&P 500 has rallied 44 percent from a 12-year low on March 9 amid growing evidence that the economy is beginning to recover from the worst recession in more than half a century. The index today climbed above 966, the average year-end forecast of Wall Street strategists as of March 9.
Investors will find ???a lot of bargains??? among U.S. stocks in the next year as the economy recovers and consumer spending improves, said Mario Gabelli, the chairman and chief executive officer of Gamco Investors Inc.
???The world is simple,??? he said. ???You just want to find the best ideas, risk adjusted.???
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