BLBG: S&P 500 Rises To Four-Year High As ECB Details Bond Plan
The Standard & Poor’s 500 Index (SPX) climbed above the highest closing level since 2008 as the European Central Bank announced specifics of its bond-buying plan and data boosted optimism in the labor market.
JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) jumped at least 3.4 percent, leading gains in the Dow Jones Industrial Average. Amazon.com Inc. (AMZN) advanced 1.1 percent after a report that the world’s largest online retailer may announce a smartphone. Walgreen Co. (WAG) tumbled 1.6 percent after reporting fiscal fourth-quarter sales that trailed analysts’ estimates.
The S&P 500 climbed 1.4 percent to 1,422.36 at 10:13 a.m. in New York. The Dow advanced 179.37 points, or 1.4 percent, to 13,226.85 today. Trading in S&P 500 companies was up 30 percent from the 30-day average at this time of day.
“We are in a period where we are peeling away the onion little by little, all the uncertainties, what’s going to happen in Europe and what’s going to happen here,” Dan Veru, chief investment officer at Palisade Capital Management LLC in Fort Lee, New Jersey, said in a phone interview. His firm oversees $3.5 billion. “I think Draghi is serious about putting Europe on the positive path.”
Draghi said policy makers agreed to an unlimited bond- purchase program as they try to regain control of interest rates in the euro area. He said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability.”
U.S. jobless claims declined last week and companies added more workers than forecast in August, reports showed today before monthly payrolls data tomorrow. Service industries in the U.S. expanded in August at a faster pace than forecast.
Banks Gain
Financial, industrial and commodity shares led gains among 10 groups in the S&P 500, climbing at least 1.5 percent. JPMorgan rose 3.4 percent to $38.38. Alcoa Inc. (AA) added 2.1 percent to $8.66.
Bank of America, the second-biggest U.S. lender by assets, advanced 3.7 percent to $8.24 after the lender agreed to sell Strategic Partners Inc. to private-equity investors Partners Group Holding AG and Avista Capital Partners. Bank of America has sold more than $50 billion in assets and businesses since Brian T. Moynihan took over as CEO in 2010, as it seeks to increase capital before stricter international rules come into force.
Amazon.com rose 1.1 percent to $249 after the Verge reported the company may announce a smartphone as early as today. It cited people familiar with the matter. Amazon will introduce at least three new devices, including two tablet computers and an e-book reader, at an event today, according to a Barclays Plc note from Sept. 4.
Walgreen Slumps
Walgreen fell 1.6 percent to $35.31. Sales in the three months ended Aug. 31 fell about 4.9 percent to $17.1 billion, the company said today in a statement. That trailed the $17.2 billion average of 17 analysts’ estimates compiled by Bloomberg. Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts Inc. customers expired.
VeriFone Systems Inc. (PAY) slumped 11 percent to $31.50 after the maker of credit-card terminals said late yesterday that third-quarter revenue rose to $489.1 million, missing the average analyst estimate of $498.7 million in a Bloomberg survey.
To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
