U.S. stocks
rose, giving the Standard & Poor’s 500 Index its first back-to-back weekly
rally since April, on speculation central banks will act to boost the economy
as investors awaited Greek elections this weekend.
Microsoft
Corp. (MSFT) gained
2.3 percent as a person familiar with the matter said the company will announce
plans next week to sell a tablet computer running the next version of Windows.
IntercontinentalExchange Inc. added 4.7 percent as its bid for the London Metal
Exchange was rejected in favor of Hong Kong Exchanges & Clearing Ltd.’s
offer. Facebook Inc.
(FB) jumped
6.1 percent and capped the first weekly gain since it went public.
The S&P
500 rose 1 percent to 1,342.84 at 4 p.m. New York time, the highest since May
11. The Dow Jones Industrial Average climbed 115.26 points, or 0.9 percent, to
12,767.17. Trading volume for exchange-listed stocks in the U.S. was about 7.5
billion shares, 11 percent above the three-month average.
“Ahead of
Sunday’s election in Greece, central bankers stand ready,” Peter Boockvar,
equity strategist at Miller Tabak & Co. in New York, wrote today. “With all
the water central banks have expended out of their fire hoses in their attempt
to ‘do something,’ I can only think of magic candles. Those candles you blow
out that only flare up again immediately after.”
Expectations
for global policy action grew as central banks intensified warnings that
Europe’s failure to tame its crisis threatens the economy. European Central
Bank policy makers have overcome a key concern about taking the benchmark rate
below 1 percent, two euro-area central bank officials said. The June 17 vote
will turn on whether Greeks accept open-ended austerity to stay in the euro or
reject the conditions of a bailout and risk becoming the first to exit the
17-member currency.
Fed Action
Stocks also
rose on speculation the Federal Reserve may join central banks in taking steps
to boost growth. Data today showed that industrial production unexpectedly fell
and consumer confidence slid, adding to evidence of U.S. economic weakness.
U.S. policy makers meet June 19-20.
“There’s
hope of some coordinated action if bad news does occur,” said Tim Ghriskey, who
oversees about $2 billion as chief investment officer of Solaris Group in
Bedford Hills, New York. He spoke in a telephone interview. “There’s the Greek
election. It could be an ongoing process.”
David
Bianco, Deutsche Bank AG’s chief U.S. equity strategist, withdrew a forecast
that the S&P 500 (SPX) will post a near-term gain of 5 percent or more,
citing uncertainty before Greece’s elections. While Bianco maintained his
year-end projection of 1,475 for the index, he said he’s no longer convinced
the next 5 percent move in the gauge is higher.
Least-Tied
Concern
about Europe’s debt crisis and a global slowdown put the S&P 500 on the
brink of a so-called correction this month. It fell 9.9 percent from an almost
four-year high in April through June 1. Since then, the lowest valuation in six
months and bets on policy action drove the gauge up 5.1 percent. The S&P
500 rose 1.3 percent this week.
All 10
groups in the S&P 500 rose today as energy and technology shares had the
biggest rallies. Chevron Corp.
(CVX), the
second-largest U.S. energy company, added 2.4 percent to $104.33. Oracle Corp. (ORCL), the biggest maker of
database software, added 2.9 percent to $27.70 after ThinkEquity LLC
recommended buying the shares.
Microsoft
jumped 2.3 percent to $30.02. The company may demonstrate the tablet computer
at an event scheduled in Los Angeles on June 18, said a person familiar with
the plans. The company has said it aims to release the new Windows 8 operating
system in time for the holiday season. Frank Shaw, a spokesman for Microsoft,
declined to comment.
Bidding
Process
IntercontinentalExchange,
the second-largest U.S. futures market, rallied 4.7 percent to $134.80. ICE (ICE) and Hong Kong
Exchanges were the two parties left in a bidding process announced by the LME
in September. The LME said today it would no longer be seeking competing
takeover offers.
Facebook
rose 6.1 percent to $30.01, extending its weekly advance to 11 percent. The
company asked a court to consolidate more than 40 shareholder lawsuits over its
initial public offering last month. Investors sued Facebook and Nasdaq OMX
Group Inc. over problems in trading company shares on May 18, the first day
they were publicly available.
Navistar
International Corp. (NAV) soared 7.6 percent to $29.95. MHR Fund Management
LLC disclosed a 13.6 percent stake in the truckmaker, more than billionaire
investor Carl Icahn’s 11.9 percent holding. MHR is run by Mark Rachesky, a
former protege of Icahn’s. MHR “may seek to engage in discussions with
management,” according to a regulatory filing.
Financial
Shares
Financial
shares in the S&P 500 advanced 1.4 percent.Bank of America Corp. (BAC) (BAC) added 3.1 percent
to $7.90, after slumping as much as 1.4 percent earlier today.
David
Trone, an analyst at JMP Securities LLC, expects some of the largest financial
institutions to underperform as recent developments in Europe increase concern
the region will experience “significant” damage.
SAIC Inc.
(SAI) (SAI) jumped
5.1 percent to $12.24. The defense contractor specializing in computer services
was raised to overweight from neutral at JPMorgan Chase & Co.
The
Bloomberg U.S. Airlines Index (BUSAIRL) of 10 stocks slumped 2.2 percent. AMR
Corp. Chief Executive Officer Tom Horton asked an ad hoc bondholder group to
study his plan for a stand-alone American Airlines before reviewing a possible
merger for the bankrupt carrier, two people familiar with the matter said.
Horton expressed frustration with attention being given to a pending US Airways Group Inc.
(LCC) (LCC) merger
bid, the people said.
US Airways
US Airways
tumbled 3.6 percent to $12.03. Southwest Airlines Co. (LUV) (LUV) dropped 2.9 percent
to $8.93.
Any
multiyear rally in U.S. stocks may depend on a signal that the bond market has
yet to send, according to Michael Hartnett, Bank of America’s chief global
equity strategist.
Bond yields
have to reach “an inflection point” before shares can move into what’s known as
a secular bull market if history is any guide, Hartnett wrote this week.
Hartnett
highlighted three inflection points in the past century that foreshadowed
stock-market booms during the 1920s, after World War II, and throughout most of
the 1980s and 1990s.
A
comparable surge in share prices is unlikely, he wrote, “until Treasury yields
rise in response to stronger growth and a healthier global economy.” The
10-year yield fell to a record 1.4387 percent this month.
To contact
the reporter on this story: Rita Nazareth in New York at
rnazareth@bloomberg.net
To contact
the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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