US stocks rise
U.S. stocks rose, completing the Dow Jones Industrial Average’s best two-week rally since 2000, as energy producers climbed on a gain in oil and Federal Reserve Chairman Ben S. Bernanke said the central bank is “winding down” emergency measures established to end the financial crisis.
Exxon Mobil Corp. and ConocoPhillips advanced as oil and natural gas prices extended their weekly gain. Chubb Corp. jumped 6.5 percent, leading insurers higher, after raising its 2009 forecast. Microsoft Corp. and Amazon.com Inc. retreated more than 7 percent after quarterly results missed estimates, breaking the Nasdaq Composite Index’s 12-day winning streak that was the longest since 1992.
The Standard & Poor’s 500 Index rose 0.3 percent to 979.26, reversing a 1.1 percent loss from Microsoft and Amazon.com’s reports. The Dow average added 23.95 points, or 0.3 percent, to 9,093.24, one day after surpassing 9,000 for the first time since January. It’s surged 12 percent since July 10.
“We’re seeing these weak opens, only to firm up throughout the day,” said David Rolfe, who oversees $450 million as chief investment officer for Wedgewood Partners in St. Louis. “You can almost see the panic of those that aren’t in.”
Index futures fell after the close of regular stock trading yesterday following worse-than-forecast results from Microsoft, Amazon.com and American Express Co. The market rebounded today after Europe’s economy moved closer to recovery as manufacturing and service industries contracted at the slowest rate since August and German business confidence reached a nine-month high.
‘Worst Is Over’
Stocks erased their losses as energy companies rebounded from their lows, and Bernanke’s comments pushed the S&P 500 to its intraday peak. He told the House Financial Services Committee that the Fed’s emergency lending programs are diminishing in size.
Bernanke is saying that “the worst is over,” said Bartley Barnett, head of equity trading at Morgan Keegan & Co. in Memphis, Tennessee. “Everyone is in awe that the market is continuing to stay above 9,000. It shows the power of the money that’s on the sidelines.”
Investors are pouring money into shares on speculation the fastest rally since the Great Depression will reverse losses from last year, when the S&P 500 fell 38 percent. U.S. mutual funds received $1.5 billion of net inflows this week, the second-highest amount since February 2008, according to AMG Data Services in Arcata, California. The S&P 500 has surged 45 percent since March 9.
Crude oil for September delivery added 1.3 percent to $68.05 in New York after falling 1 percent. Natural gas futures expiring next month climbed 4.1 percent to $3.695 per million British thermal units.
Exxon added 1 percent to $72.29. ConocoPhillips rose 2.2 percent to $44.95.
Chubb, the insurer of high-end homes and corporate boards, added 6.5 percent to $45.37. Its second-quarter profit beat analysts’ estimates, and the company raised its 2009 forecast.
Among S&P 500 companies that have posted second-quarter results, 75 percent beat the average analyst forecast, according to data compiled by Bloomberg. That would be the highest rate for a full quarter, Bloomberg data going back to 1993 show. About 300 S&P 500 companies have yet to report for the period.
Microsoft fell 8.3 percent, the most since January, to $23.45. The biggest software maker reported a 29 percent drop in fiscal fourth-quarter earnings and posted sales that missed analysts’ estimates, a sign that demand for Windows and Office software is still declining. Per-share profit excluding some items was 36 cents, missing the average forecast by 2.4 percent.
Technology shares in the S&P 500 fell 0.7 percent, the most among 10 industries, a day after rising to the highest level since September on EBay Inc.’s better-than-estimated earnings. MEMC Electronic Materials Inc., the maker of silicon wafers for solar modules, lost 10 percent to $18.72. Its second-quarter profit declined 96 percent on low prices and weak demand.
Amazon.com lost 7.9 percent, the most since November, to $86.49. The world’s largest Internet retailer has sought to ward off competitors by cutting prices and adding products, such as laptops and outdoor equipment. Its low prices and free-shipping offers have started to eat into profit, said Aaron Kessler, an analyst at Kaufman Brothers LP. Sales of $4.65 billion were 1 percent less than analysts estimated on average.
Black & Decker Corp. rose 10 percent to $37.13. The largest maker of hand tools posted second-quarter profit of 63 cents a share, beating the average analyst estimate by 74 percent.
RadioShack Corp. rose 10 percent to $16.06. The second- largest U.S. electronics chain was upgraded to “outperform” from “sector perform” at RBC Capital Markets, and to “outperform” from “market perform” at FBR Capital Markets Corp.
SunPower Corp. surged 29 percent to $32.04 after the second-biggest U.S. solar-cell maker reported an unexpected quarterly profit and boosted its sales forecast for the year.