U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will top its highest close since 2008, before a report that may show home sales climbed and as American International Group Inc. rallied on earnings.
AIG (AIG) surged 6.6 percent as the bailed-out insurer said profit jumped 77 percent. Salesforce.com Inc. (CRM), the largest seller of online customer-management software, climbed 12 percent after billings growth topped analysts’ estimates. El Paso Corp. rallied 0.8 percent as Apollo Global Management LLC is said to be near a deal to acquire the company’s oil- exploration business for about $7 billion.
S&P 500 futures expiring in March added 0.2 percent to 1,365 at 8:38 a.m. New York time, paring a gain of as much as 0.4 percent. The benchmark gauge for American equities yesterday closed near its April 2011 peak of 1,363.61 (SPX), which was the highest level since June 2008. Dow Jones Industrial Average futures rose 13 points, or 0.1 percent, to 12,987.
Equity futures advanced before a report that may show purchases of new homes in the U.S. rose in January to a nine- month high, more evidence the housing market is improving. Finance ministers and central bank governors from the Group of 20 nations meet tomorrow in Mexico and may discuss committing fresh cash to the International Monetary Fund to defuse the European fiscal crisis.
The S&P 500 has risen 3.9 percent in February through yesterday, poised for a third straight month of gains, the longest streak in a year. It is up 8.4 percent in 2012 amid better-than-estimated economic and earnings reports. Of the 438 S&P 500 companies that reported results since Jan. 9, 297 posted per-share earnings that beat projections, Bloomberg data show.
AIG Soars
AIG surged 6.6 percent to $29.85. The jump in earnings was fueled by a tax benefit and an increase in the value of a stake in Asian insurer AIA Group Ltd.
Salesforce.com added 12 percent to $147.37. The amount Salesforce invoiced its customers grew 57 percent in the fourth quarter from a year earlier, topping the 31 percent predicted by Brent Thill, an analyst at UBS AG in San Francisco. Billings rose 29 percent in the third quarter.
El Paso (EP) gained 0.8 percent to $26.98. An agreement may be announced as soon as today, according to a person with knowledge of the situation, who declined to be named because the talks are private. The negotiations are fluid and may still fall apart, this person said. Apollo is working with Riverstone Holdings LLC and at least one other partner and is arranging between $4.5 billion and $5 billion in financing, the person said.
Sprint, Gap
Sprint Nextel Corp. (S) dropped 2.4 percent to $2.46. Comcast Corp. (CMCSA), the largest U.S. cable company, sued a unit of Sprint alleging infringement of four telecommunications patents. Comcast contends that services provided by the nation’s third- largest wireless phone company misappropriate technology used for accessing communication data, determining a telephone number and optimizing a telephony network.
Gap Inc. (GPS) retreated 1.9 percent to $23.07. The largest U.S. apparel chain forecast profit this year that was less than some analysts estimated as sales decline at its Old Navy stores. Chief Executive Officer Glenn Murphy failed to boost holiday sales at Old Navy after introducing a new marketing campaign for the more-than-1,000-store chain during the third quarter.
Alpha Natural Resources Inc. (ANR) fell 3.6 percent to $19.10. The coal producer that bought Massey Energy Co. for $7.1 billion in June posted an unexpected fourth-quarter loss and cut its 2012 output forecast as U.S. electricity generators switched to cheaper natural gas.
Stocks are in the midst of a “hope phase” that may be as short-lived as one that occurred a year earlier, according to Albert Edwards, a global strategist at Societe Generale SA.
Year-Ago Swings
He compares the S&P 500’s performance since October with its year-ago swings. Last year, the index dropped during the second half of February, rebounded to reach its 2011 high in April, and tumbled in a second-half bout of volatility.
This year’s gains reflect anticipation of sustained U.S. economic growth and a so-called soft landing for the Chinese economy, according to Edwards, based in London. He also cited optimism that Greece’s second bailout and the European Central Bank’s moves to ease bank financing will help the euro region.
“Hope still beats in the breast of equity investors,” he wrote. “The market will rip out that hope and consume it in front of investors’ eyes.”
Corporate earnings may be a catalyst for the abandonment of hope, the report said. Edwards noted that estimates for S&P 500 companies as a group are dropping for the first time since late 2007, when the U.S. economy was sliding into a recession.
Edwards reiterated in September that the index will fall to 400, a plunge of about 70 percent from yesterday’s close, before the next bull market begins. He saw the yield on 10-year Treasury notes falling to 1.5 percent. Last year’s low was 1.67 percent.
