BLBG: U.S. Stocks Rise on China Exports as ECB Sees Recovery
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second straight day, as China’s exports beat estimates and European Central Bank President Mario Draghi sees an economic rebound later in 2013.
Equities pared gains as Piper Jaffray Cos. lowered its share-price estimate for Apple Inc. (AAPL) The world’s most valuable company added 0.4 percent, trimming an earlier rally of as much as 2.3 percent. Ford Motor Co. (F) climbed 2.6 percent after boosting its dividend. Supervalu Inc. (SVU) rose 12 percent as a Cerberus Capital Management LP-led investor group agreed to buy five of its chains in a deal valued at about $3.3 billion.
The S&P 500 rose 0.2 percent to 1,464.01 at 10:50 a.m. New York time, paring an earlier advance of as much as 0.6 percent. The Dow Jones Industrial Average added 8.45 points, or 0.1 percent, to 13,398.96. The Russell 2000 Index of small companies fell 0.2 percent to 877.39. Trading in S&P 500 companies was 16 percent above the 30-day average at this time of day.
“China is definitely healing,” said Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston. “Stocks started to do better after Draghi’s comments. People feel that the recovery will take hold. As long as we don’t see Greek-Portugal-Spain debacle in 2013, those markets should continue to do better.”
Stocks followed global equities higher as China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted. Draghi said “a gradual recovery should start” in the euro area later this year as ECB measures work their way through the economy. More Americans than forecast filed applications for unemployment benefits last week.
Corporate Earnings
Investors also watched corporate results. Fourth-quarter profits at S&P 500 companies grew 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.
Seven out of 10 groups in the S&P 500 rose today as telephone and financial shares had the biggest gains.
Ford jumped 2.6 percent to $13.82. The second-largest U.S. automaker doubled its quarterly dividend to 10 cents per share after record profit margins boosted its cash. Ford, which resumed paying a dividend last year after a five-year hiatus, cited its strengthening business as the reason it is boosting the payout.
Supervalu climbed 12 percent to $3.39. A Cerberus-led investor group agreed to acquire Supervalu’s Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market grocery stores. Cerberus also will lead a group to conduct a tender offer to buy as much as 30 percent of Supervalu’s common stock for $4 a share in cash, the companies said today in a statement.
News Corp. (NWSA)
News Corp. gained 1.2 percent to $26.71. The media company run by billionaire Rupert Murdoch was raised to outperform from market perform at Sanford C Bernstein & Co.
Altria Group Inc. (MO) rose 2.4 percent to $32.66. The largest seller of tobacco in the U.S. was raised to buy from hold at Stifel Nicolaus Corp. by equity analyst Christopher Growe. The 12-month share-price estimate is $36.
Apple added 0.4 percent to $519.07. Piper Jaffray cut its share-price estimate to $875 from $900. Separately, Chief Executive Officer Tim Cook met with the chairman of China Mobile Ltd. (941), the wireless operator with 707 million subscribers and no agreement to sell iPhones.
Tiffany & Co. (TIF) slumped 3.1 percent to $62.31. The world’s second-largest luxury jewelry retailer said full-year earnings will be at the low end of its forecast after holiday sales growth slowed in the Americas and Asia.
Luxury Accessories
Other luxury accessories makers slumped. Coach Inc. dropped 1.4 percent to $57.13 and Michael Kors Holdings Ltd. declined 2.1 percent to $52.18.
Investor sentiment toward U.S. stocks is poised to change for the better and contribute to a multiyear advance, according to Ralph Acampora, a partner and head of market research at Altaira Wealth Management LLC.
“I have never seen so many people so negative on the stock market for so long,” Acampora wrote yesterday in a posting on Twitter. The Minneapolis-based analyst has been a technical analyst, focusing on price charts, since 1966.
Optimism peaked in September 2011, judging by the average gap between the percentage of bulls and bears in the prior 52 weeks of American Association of Individual Investors surveys. The latest average was 2.6 percentage points, close to last year’s low of 2.02 points in July.
The potential for a sentiment shift was among 11 reasons that Acampora provided for being a “secular bull” in postings on Twitter, where he had about 3,750 followers as of yesterday. Gains in overseas stock markets and the 10-year Treasury note yield’s rise above 1.9 percent this month were among others.
“The March 2009 low was and is a generational low,” he wrote. “We will work our way irregularly higher.” The S&P 500 has more than doubled since dropping to a 12-year low of 676.53 on March 9, 2009.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
