Financial (S5FINL), industrial and commodity shares rose the most among 10 groups in theS&P 500. Bank of America Corp., General Electric Co. and Dow Chemical Co. added at least 1.6 percent. International Business Machines Corp. rallied for a seventh day to an all-time high.Apple Inc. (AAPL) reversed earlier gains after topping $600 for the first time. The Dow Jones Transportation Average, a proxy for economic growth, increased 3.3 percent.
The S&P 500 advanced 0.6 percent to 1,402.60 at 4 p.m. New York time, exceeding the median 2012 projection of strategists surveyed by Bloomberg of 1,400. The Dow Jones Industrial Average increased 58.66 points, or 0.4 percent, to 13,252.76, gaining for a seventh straight day, the longest winning streak in 13 months. About 7.1 billion shares changed hands on U.S. exchanges, or 7.5 percent above the three-month average.
“It’s been a smooth ride,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. His firm oversees $3.51 trillion as the world’s largest asset manager. “The economy is doing better than people thought. The buying is justified.”
The S&P 500 closed at its highest level since June 5, 2008. (SPX) On that date, the index climbed 2 percent to 1,404.05, led by a 7.8 percent rally in Lehman Brothers Holdings Inc. The securities firm had lost a third of its value in the previous month and filed for bankruptcy in September 2008. The S&P 500 went on to plunge 52 percent before bottoming in March 2009.
Best Since 1998
The benchmark gauge is on pace for the best first quarter since 1998, after rallying 12 percent, amid better-than- estimated economic and corporate reports. It trades at 14.5 times reported earnings, the highest valuation level since July while still below the average since 1954 of 16.4 times earnings.
Equities rose today as manufacturing in the New York region expanded in March at the fastest pace since June 2010. Claims for jobless benefits fell last week, matching the lowest level in four years, more evidence the labor market is improving. Separate data showed that the Federal Reserve Bank of Philadelphia’s general economic index increased to 12.5 in March from 10.2 last month, beating economists’ estimates.
“The U.S. economic numbers are quite encouraging,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “People who haven’t gotten into the market might be drawn in because the economy is improving and there are some relative good values out there.”
GE, Dow Chemical
More than two stocks gained for each falling on U.S. exchanges today. The Morgan Stanley (MS) Cyclical Index of companies most-dependent on economic growth advanced 1.6 percent. GE added 1.9 percent to $20.16. Dow Chemical rose 1.6 percent to $35.
Bank of America rallied the most in the Dow, surging 4.5 percent to $9.24. The KBW Bank Index (BKX) jumped 2.7 percent as all of its 24 stocks advanced. The gauge has climbed 8.8 percent in three days following dividend increases this week by banks including JPMorgan Chase & Co. (JPM) Shares of the New York-based bank added 2.6 percent to $44.70.
S&P 500 companies have never paid more dividends, according to Howard Silverblatt, S&P’s senior index analyst. Announced payouts imply an annual dividend rate of $29.02 per index share, he said. The prior record was $28.96 in June 2008 before the figure slid 26 percent to $21.44 in August 2009. It has since risen 35 percent. S&P 500 companies are paying out 30 percent of profits, less than the average of 52 percent, S&P data show.
‘Back in Fashion’
“Companies have the money, they have the ability, and dividends are back in fashion,” he said in a telephone interview today. “We would expect to see more banks.”
Technology shares, which comprise more than 20 percent of the S&P 500, rose 0.3 percent.IBM (IBM) advanced to a record, adding 0.6 percent to $206. Apple Inc. fell 0.7 percent to $585.56, snapping a six-day rally. The company will start selling a new iPad tablet tomorrow and cut the price of the previous version, helping widen its lead over competitors.
Advanced Micro Devices Inc. (AMD) gained 6.3 percent to $8.25. The second-largest maker of processors for personal computers was moved to buy from hold at Jefferies, which increased the 12- month price estimate to $10.50 from $7.
Cisco Systems Inc. (CSCO) dropped 1.4 percent, the most in the Dow, to $19.91. The maker of equipment for computer networks agreed to buy NDS Group Ltd. in a deal valued at about $5 billion to add software used in next-generation video services.
Transportation Stocks
A measure of transportation shares in the S&P 500 had the biggest gain among 24 industries, adding 3.2 percent. The Bloomberg U.S. Airlines Index jumped 3.8 percent. FedEx Corp. (FDX)increased 2.6 percent to $94.61.
CSX Corp. (CSX) rose 8.5 percent, the most in the S&P 500, to $21.92. The biggest eastern-U.S. railroad expects record first- quarter earnings even with a drop of as much as 30 percent in domestic utility coal shipments.
Scholastic Corp. (SCHL) surged 13 percent to $36.36, the highest level since February 2008. The children’s book publisher boosted its full-year forecast, saying it now expects to earn at least $2.60 a share from continuing operations. The company had projected $2.10 at most.
Nucor Corp. (NUE) fell 1.1 percent to $43.45. The largest U.S. steelmaker by market value forecast first-quarter profit that missed analysts’ estimates after an increase in imports and domestic production.
EBay Inc. (EBAY) slumped 2.1 percent to $36.83. The largest Internet marketplace was downgraded to neutral from outperform at Credit Suisse Group AG.
Guess? Inc. (GES) tumbled 10 percent, the most in the Russell 1000 Index, to $32.97. The clothing retailer forecast fiscal 2013 earnings of no more than $2.65 a share, below the average analyst estimate of $3.16 a share, according to a Bloomberg survey.
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
http://www.bloomberg.com/news/2012-03-15/u-s-stock-futures-rise-before-jobs-manufacturing-data.html
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