Citigroup Inc. (C) climbed 1.8 percent after fixed-income trading revenue more than doubled. Procter & Gamble Co. (PG) gained 1.5 percent as the world’s largest consumer-products company lifted its quarterly dividend. Apple Inc. (AAPL) slumped 4.2 percent, the most since October, on concern mobile-phone carriers may cut subsidies for the iPhone. Mattel Inc. (MAT), the largest toymaker, dropped 9.1 percent as sales trailed analysts’ estimates.

About six stocks rose for every five that fell on U.S. exchanges at 4 p.m. New York time, as 6.4 billion shares changed hands, or 6 percent below the three-month average. The S&P 500 decreased 0.1 percent to 1,369.57. The Dow Jones Industrial Average gained 71.82 points, or 0.6 percent, to 12,921.41. The Nasdaq Composite Index (CCMP), which has advanced 15 percent in 2012, retreated 0.8 percent to 2,988.40 today.

“The U.S. economic recovery looks intact,” Eric Teal, Raleigh, North Carolina-based chief investment officer at First Citizens Bancshares Inc., which oversees $4.5 billion, said in a telephone interview. “Earnings will continue to grind higher. That explains the market resilience.”

The S&P 500 swung between gains and losses as banks rallied, while technology shares slumped. Retail sales rose 0.8 percent in March, almost three times as large as projected. Investors also watched earnings reports. Profit per share at S&P 500 companies rose 1.7 percent in the first quarter, according to estimates compiled by Bloomberg.

Citigroup Gains

Citigroup gained 1.8 percent to $34. Fixed-income trading revenue jumped to $4.74 billion from $1.72 billion in the last three months of 2011 and $3.98 billion a year earlier, the New York-based company said today in a statement. David Trone, an analyst in New York with JMP Securities LLC, predicted fixed- income revenue of $2.78 billion.

The KBW Bank Index added 1 percent as 23 of its 24 stocks gained. Bank of America Corp. advanced 1.3 percent to $8.79. Wells Fargo & Co. (WFC) increased 0.9 percent to $33.15.

Procter & Gamble rallied 1.5 percent, the second-biggest gain in the Dow, to $66.78. The Cincinnati-based company lifted its quarterly dividend to 56.2 cents a share from 52.5 cents.

Wal-Mart Stores Inc. (WMT) added 1.4 percent to $60.58. The world’s largest retailer nominated Google Inc. (GOOG)’s Marissa Mayer for election to its board as the company works to improve its online operations.

Caterpillar’s Rating

Caterpillar Inc. (CAT) rose 0.8 percent to $106.74. The world’s largest construction and mining-equipment maker was raised to buy from neutral at Bank of America, which cited attractive valuation and solid fundamentals.

The S&P 500 fell as much as 0.4 percent as technology shares, which comprise 20 percent of the index, retreated. The industry has surged 17 percent this year, the most among 10 groups and almost double the S&P 500’s rally during the period.

Apple, which soared 43 percent in 2012, dropped 4.2 percent to $580.13 today. Verizon Wireless, a U.S. partner of Apple, said last week that it will begin charging customers $30 to upgrade to a new phone. The move suggests mobile-phone service providers may take other steps, including trimming subsidies, to keep sales of the iPhone from eating into their margins, said Walter Piecyk, an analyst at BTIG LLC in New York.

“Apple is ubiquitous, it’s well-owned, it’s had a huge run up and people are taking some profits,” Matt McCormick, who helps oversee $6.2 billion at Bahl & Gaynor Inc. in Cincinnati, said in a telephone interview. “If you’re concerned about the market being choppy, you look at positions that had the biggest gains and Apple would clearly be one of those candidates.”

Waning Demand

Analysts at Wedge Partners said in an April 13 research note that demand for the newest version of Apple’s iPad is beginning to wane, citing the prospect that Apple’s earnings report, due next week, will show sales of the tablet missed analysts’ predictions last quarter.

Nasdaq OMX Group Inc. (NDAQ) said late on April 13 that Texas Instruments (TXN) Inc. will replace First Solar Inc. (FSLR) in the Nasdaq-100 (NDX) Index, the basis for this year’s fifth-most-traded U.S. exchange-traded fund. Because Texas Instruments has a larger market capitalization than First Solar, other stocks in the index are likely to see their proportion shrink, said Dave Lutz, head of ETF trading and strategy at Stifel Nicolaus & Co.

Apple influences the price of the Nasdaq-100 more than any other stock, accounting for almost 19 percent of its value. That’s double Microsoft Corp.’s weighting, the data show. Lutz, based in Baltimore, said in an e-mail that Apple shares may be down in part because of Nasdaq OMX’s decision.

Mattel, Gannett

Mattel slumped 9.1 percent, the most in the S&P 500, to $31.01. North American retailers kept inventories of toys and dolls tight, causing first-quarter sales to trail analysts’ estimates.

Gannett Co. tumbled 7.7 percent to $13.89. The owner of 82 daily newspapers including USA Today reported a 25 percent drop in first-quarter profit as advertising revenue declined.

Google slid 3 percent to $606.07. The world’s most popular search engine “impeded” and “delayed” a U.S. inquiry into its data collection, according to the latest in a series of regulatory probes of the company’s privacy practices. Google said it wasn’t “found to have violated any laws” in the investigation by the U.S. Federal Communications Commission.

Treasury yields below zero on an inflation-adjusted basis for only the second time since Dwight D. Eisenhower’s presidency have split Wall Street’s biggest firms, underscoring the relative-value dilemma equity investors face following the biggest first-quarter rally in 14 years.

Buying Opportunity

For Goldman Sachs Group Inc.’s Peter Oppenheimer, U.S. stocks offer a once-in-a-generation buying opportunity after yields on 10-year Treasuries fell to about minus 0.3 percent when the rate of inflation is deducted. Morgan Stanley’s Adam Parker advises caution, saying Federal Reserve stimulus that has led the fixed-income rally can’t last forever.

Last month’s jobs growth, which was lower than estimated by any economist in a Bloomberg survey, underscored the economy’s reliance on the Fed’s help since the financial crisis began in 2007. At the same time, record-low yields on Treasuries are driving investors to riskier assets such as stocks, said Howard Ward at Gamco Investors Inc. in Rye, New York.

“Capital will chase returns,” Ward, who helps oversee $35 billion, said in an April 11 phone interview. “There’s a tremendous shortage of investment income and there are fewer places to go to generate that,” he said. “Stocks are to a large extent the only game in town for earning a respectable return.”

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/2012-04-16/u-s-stock-index-futures-advance-before-retail-sales-data.html

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