S&P 500 Advances to Five-Year High on Economic Reports
U.S. stocks rose, sending the Standard & Poor’s 500 Index to a five-year high, amid better- than-forecast initial jobless claims and housing data.
A measure of homebuilders in S&P indexes jumped 2.1 percent and was poised for the highest closing level since 2007. EBay Inc. (EBAY), operator of the world’s largest online marketplace, increased 2.9 percent as revenue topped some analysts’ estimates. BlackRock Inc. (BLK), the world’s biggest money manager, added 4.2 percent as earnings increased 24 percent and the firm boosted its dividend and its share buyback program.
The S&P 500 rose 0.5 percent to 1,480.06 at 12:15 p.m. New York time. The Dow Jones Industrial Average added 75.39 points, or 0.6 percent, to 13,586.62. Trading in S&P 500 companies was 19 percent above the 30-day average at this time of day.
“The economy is entering the year maybe not with a running start, but certainly a head start,” said Jack Ablin, who helps oversee about $66 billion as chief investment officer of BMO Private Bank in Chicago. He spoke in a telephone interview. “It helps build a nice story for 2013.”
Equities rose as builders broke ground on more houses than forecast in December, capping the best year for the industry since 2008, another sign residential real estate is boosting the U.S. economic expansion. The number of Americans filing first- time claims for unemployment insurance payments fell more than forecast last week to the lowest level in five years, pointing to further improvement in the labor market.
Spending Cuts
A separate report showed that manufacturing in the Philadelphia region unexpectedly contracted in January, an indication companies are becoming more concerned about across- the-board U.S. government spending cuts that could slow growth.
About 71 percent of the 52 S&P 500 (SPXL1) companies which have reported quarterly results beat analysts forecasts. Fourth- quarter profits grew 2.5 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second- slowest quarterly growth since 2009, the data show.
The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, fell 1 percent to 13.28. The gauge was poised for the lowest level since 2007.
All 11 companies in a measure of homebuilders in S&P indexes gained. PulteGroup Inc. (PHM), the largest U.S. homebuilder by revenue, rose 4 percent to $20.12. Toll Brothers Inc., the biggest U.S. luxury-home builder, advanced 2.2 percent to $35.67.
More Revenue
EBay rose 2.9 percent to $54.43. The results suggest Chief Executive Officer John Donahoe is sustaining a turnaround effort that began in March 2008, when he succeeded Meg Whitman. The company has been pushing to generate more revenue from consumers shopping on tablets and smartphones, and from retailers that use EBay to sell their merchandise.
BlackRock added 4.2 percent to $231.63. Net income climbed to $690 million, or $3.93 a share, from $555 million, or $3.05, a year earlier, the New York-based company said today in a statement. Profit beat the $3.71 a share average estimate of six analysts surveyed by Bloomberg. BlackRock increased its quarterly dividend 12 percent to $1.68 a share and expanded its share buyback program.
CBS Corp. surged 10 percent to $41.75. The owner of the most-watched U.S. television network said it will convert its outdoor advertising division into a real estate investment trust and seek a buyer for the European and Asian parts of that business.
Regional Banks
The S&P 500 Regional Banks (S5RBNK) Index gained 2.3 percent. Fifth Third Bancorp., Ohio’s largest lender, said fourth-quarter profit rose 27 percent as the firm booked a gain on a stake in Vantiv Inc. Earnings at PNC Financial Services Group Inc. and BB&T Corp. beat analysts’ estimates. Fifth Third rose 4.4 percent to $16.24. BB&T climbed 2.1 percent to $30.95 and PNC added 3.9 percent to $62.09.
Financial shares had the worst performance in the S&P 500 among 10 industries, declining 0.1 percent.
Bank of America Corp. slumped 3.6 percent, the most in the Dow, to $11.36 after saying profit dropped 63 percent, hurt by shrinking revenue and more costs from cleaning up bad mortgages.
Citigroup Inc. (C) retreated 2.9 percent to $41.26. The third- biggest U.S. bank by assets reported a profit increase that was less than analysts estimated as litigation costs rose and benefits from releasing loan-loss reserves declined.
SLM Corp. declined 1.2 percent to $17.10. The student lender known as Sallie Mae reported a drop in fourth-quarter profit as charge-offs increased, offsetting a climb in originations.
Regulators’ Order
Boeing Co. (BA) lost less than 0.1 percent to $74.32, paring an earlier drop of as much as 2.2 percent. The company’s global fleet of 787 Dreamliners was grounded, with airlines suspending service on the most advanced civil airliner, to comply with an order from regulators following an emergency landing by one of the planes.
The Federal Aviation Administration instructed airlines to prove that lithium-ion batteries in the model, which went into service in late 2011, “are safe and in compliance,” prompting regulators in Europe and Japan to follow suit and putting all 50 Dreamliners operated by eight airlines worldwide out of duty. The number of bearish Google Inc. (GOOG) options climbed to an eight- year high on concern the company, trading within 7 percent of a record, is losing to rivals in advertising on mobile devices.
The ratio of outstanding puts to sell Google shares versus calls to buy has jumped 61 percent to 1.07-to-1 from a 2012 low in May and reached 1.12 on Jan. 2, the highest since November 2004, according to data compiled by Bloomberg. The stock peaked at $768.05 in October and has since fallen 6.9 percent.
Market Share
The world’s largest search-engine operator probably lost market share in mobile advertising last year amid increased competition from companies such as Facebook Inc. and Twitter Inc., according to estimates from EMarketer Inc., a New York- based research firm. Facebook unveiled a tool this week for searching for information posted to its social network of more than 1 billion users, creating an alternative to services now available on Google.
“The ability to put advertising around mobile is much tougher,” James Tierney, chief investment officer at W.P. Stewart Ltd. in New York, said in a Jan. 15 phone interview. His firm oversees $1.6 billion and sold its Google holdings in the second half of last year. “To us, the concern is really around the monetization of mobile.”
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Sarah Pringle in New York at springle1@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
U.S. Stock Futures Extend Gains on Housing Starts, Jobless Data
Tim Boyle/Bloomberg
Housing starts climbed 12.1 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists and the most since June 2008, the Commerce Department reported today in Washington.
Housing starts climbed 12.1 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists and the most since June 2008, the Commerce Department reported today in Washington. Photographer: Tim Boyle/Bloomberg
Jan. 17 (Bloomberg) -- U.S. housing starts climbed 12.1 percent last month to a 954,000 annual rate, the Commerce Department reported today in Washington. Applications for jobless benefits decreased by 37,000 to 335,000 in the week ended Jan. 12, the lowest level since the period ended Jan. 19, 2008, Labor Department figures showed today. Betty Liu and Sara Eisen report on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Jan. 16 (Bloomberg) -- Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc., talks about the Federal Reserve’s Beige Book business survey and negotiations over the federal debt limit. Eisenbeis speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)
Jan. 17 (Bloomberg) -- Daniel Arbess, a partner at Perella Weinberg Partners LP, Laszlo Birinyi, president of Birinyi Associates Inc., and Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., participate in a panel discussion about the outlook for the U.S. economy and equity market. Bloomberg View columnist William Cohan moderates the panel at the Bloomberg Link Global Markets Summit in New York. (Source: Bloomberg)
Rate this Page
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.