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U.S. Stocks Rise, S&P 500 Tops 1,000 for First Time Since Nov.
By Matt Townsend
Aug. 3 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index above 1,000 for the first time since November, on growing speculation the recession may be ending and an unexpected profit at Europe’s biggest bank. Oil and metals advanced, while Treasuries fell.
Equities extended gains as reports on manufacturing and construction spending topped forecasts. Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. rallied after HSBC Holdings Plc reported first-half net income of $3.35 billion as earnings from its securities unit doubled. Ford Motor Co. jumped 8.8 percent after a government incentive program helped it achieve its first monthly U.S. sales increase since 2007.
The S&P 500 added 1.4 percent to 1,001.55 at 10:32 a.m. in New York. The Dow Jones Industrial Average rallied 113.97 points, or 1.2 percent, to 9,285.58 and the Nasdaq Composite Index increased 1.1 percent to 2,000.42.
“Earnings in some sectors have been rebounding nicely,” said Eric Teal, who oversees $5 billion as chief investment officer at First Citizens Bank in Raleigh, North Carolina. “What we need are some confirming economic data to indicate the recovery is sustainable and is on a path toward growth in the third and fourth quarters.”
The S&P 500 topped 1,000 for the first time in nine months after better-than-expected profits helped restore $3.7 trillion to U.S. stock markets since March.
Office Depot Inc., Genworth Financial Inc. and Fifth Third Bancorp. rallied sevenfold or more since the benchmark index for American equities fell to a 12-year low of 676.53 on March 9. They were among 16 companies that lost more than 90 percent after the gauge last closed above 1,000 on Nov. 4.
Flirting With 1,000
The S&P 500 remains 36 percent below its all-time high of 1,565.15 on Oct. 9, 2007. Before November, the index traded above 1,000 for five years.
Profits that surpassed analysts’ estimates at a record percentage of S&P 500 companies helped push the index to its fifth consecutive monthly gain in July. The index has risen 48 percent since March 9, its steepest advance since the 1930s, according to data compiled by Bloomberg.
Former Federal Reserve Chairman Alan Greenspan said in an interview yesterday on ABC’s “This Week” program that U.S. economic growth may resume at a rate faster than most economists forecast.
“We may very well have 2.5 percent in the current quarter,” Greenspan said in the interview. “The reason is there has been such an extraordinarily high rate of inventory liquidation that the production levels are well under consumption.”
Banks Gain
Bank of America, the largest U.S. lender, gained 3.4 percent to $15.29. New York-based Citigroup rallied 1.9 percent to $3.23. Barclays Plc joined HSBC in rallying in London after reporting earnings. Barclays jumped to a 10-month high after saying earnings at its investment bank increased to 1.05 billion pounds ($1.8 billion), helped by the thaw in credit markets since its September purchase of Lehman Brothers Holdings Inc.’s North American unit.
Ford gained 8.8 percent to $8.70 after saying it will have its first monthly U.S. sales increase since 2007 as the government’s “cash-for-clunkers” incentives boosted industrywide deliveries of new vehicles to the highest levels of this year.
http://www.bloomberg.com/apps/news?pid=206...id=aNkOcvHTM3UA 
Aug 3 2009, 03:28 PM
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